Nvidia Slides 5% Ahead of High-Stakes Independent Spy Probe

Independent members of the Nvidia board have now retained former acting US Attorney Joon H. Kim and his law firm, Wachtell, Lipton, Rosen and Katz, to conduct a thorough and independent probe into the Chinese spy scandal involving co-founder and CEO Jensen Huang.

Why Nvidia specifically hired Joon H. Kim and his law firm

On Sunday, the Nvidia board developed an independent committee to investigate whether Huang’s extramarital affair compromised corporate and/or national security. The committee concluded zero data breach, with the board expressing continued confidence in his leadership role in the company.

However, in their latest action, the committee hired top prosecutor Kim to lead an external investigation into the matter. Kim is a formidable American attorney, with one of his most prolific cases being the Governor Andrew Cuomo sexual harassment investigation of 2021. His current employer, Wachtell Limpton, is arguably the most prestigious and feared “crisis management” firm on Wall Street.

By seeking an external probe, the Nvidia board is pursuing a detached and transparent approach to the matter rather than executing a corporate cover-up. This insulates members from personal legal liability, and further shareholder lawsuits and Congressional demands.

Investor lawsuits and Congressional scrutiny

On Monday, retail investor Mark Kistenmacher filed a class action lawsuit representing all investors who purchased NVDA shares between October 9, 2025 and November 8, 2026. The lawsuit demands unspecified compensatory damages from Nvidia, arguing that the firm artificially inflated its stock price by downplaying Jensen’s interactions with the former Megaspeed executive.

And while Trump has vouched for Jensen’s innocence, three House Republican Committee chairmen have summoned Huang for a closed-door Congressional briefing on the matter on November 18 (a day after its Q3 earnings report). While Jensen has pledged full cooperation with investigators, he is yet to confirm attendance for the briefing.

China and US protective measures

US lawmakers will likely propose bills to enforce tougher export rules, making it harder to sell chips to China. China, meanwhile, has called the spy allegations “unsubstantiated”, saying they are merely meant to taint its image.

NVDA stock reaction

Following Sunday’s disclosure, Nvidia stock wiped out over $200 million in market value, while rivals like AMD surged over 13%. 

At the last market close, NVDA (Nasdaq) traded at $168.89, having declined a further 5.47% in the day. 

Source: MarketWatch

While analysts expect a strong finance report on Tuesday, developments in the prevailing controversy could massively impact future stock prices since Huang is the face of the company.