Nvidia perpetual futures on Hyperliquid plunged 10% late Wednesday after media reports indicated the company’s board is preparing to remove CEO Jensen Huang. The sell-off followed allegations of two extramarital affairs, one involving a suspected Chinese spy. NVDA-USDC perps hit a low of $156.14 before recovering slightly to trade at $158.86. Tokenized shares dropped as much as 9%, while Nasdaq-listed stocks fell 8% in after-hours trading. Prediction markets reflected the rising uncertainty with Kalshi odds for Huang stepping down by November 13 surging to 64%.
Washington pressure and legal scrutiny
The Wall Street Journal reported that the board could meet immediately to discuss Huang’s future, raising the prospect of a leadership shake-up at one of the world’s most valuable companies. The New York Times added that Huang had an extramarital relationship with Kimberly Powell, Nvidia’s vice president of health care. Two former employees saw them behaving affectionately at a San Jose hotel during a March conference, which violates the firm’s code of conduct regarding conflicts of interest. An earlier report cited a memo alleging Alice Huang, a Chinese businesswoman, was recruited by China’s Ministry of State Security to gather intelligence on the founder. She also goes by Huang Le and became the controlling shareholder of Singapore-based Megaspeed in March 2023. Megaspeed, listed as a cloud partner, has drawn U.S. scrutiny over whether it helped Chinese firms obtain export-controlled chips, though no public finding of rule-breaking exists.
Sen. Kevin Cramer called on Huang to step down, stating "the potential for extortion is so tremendous that something as sensitive as Nvidia chips, I just think he’s got to go." Former National Economic Council director Larry Kudlow urged him to resign immediately, adding he was "not here to indict" but that Huang should step aside while investigations proceed. Senate Democratic leader Chuck Schumer accused President Donald Trump of failing to act after being briefed, calling it a "dereliction of duty." Rep. John Moolenaar questioned whether Huang shared privileged information or lobbied against chip export restrictions. House Foreign Affairs Committee Chairman Brian Mast prepared to subpoena Huang unless he responded to a request for a closed-door briefing on November 18, the day after quarterly earnings. The independent board members retained Joon Kim and his firm Wachtell, Lipton, Rosen & Katz to carry out the investigation announced on Sunday.
Market impact and industry ripple effects
Nvidia lost approximately $430 billion in market value over two days, wiping out all gains for 2026. Shares closed down 5.5% at $168.89 on Tuesday after a 4.3% drop on Monday, leaving the stock down 9.5% since Friday’s close. U.S. stock futures fell Wednesday evening with S&P 500 futures losing 0.4% and Nasdaq 100 dropping 0.8%. Asian equities were mixed in early Thursday trading, with South Korea’s Kospi slipping 0.3% and Japan’s Nikkei 225 edging up 0.2%. This turmoil complicates the AI industry’s expansion plans, as Nvidia remains the dominant supplier of AI chips and an investor in infrastructure builders.
A political backlash against data centers, now compounded by this crisis, could force a slowdown that leaders have struggled to achieve voluntarily. Anthony Aguirre, CEO of the Future of Life Institute, said a slowdown would be welcome, noting "I’ll take whatever I can get." He argued that resistance to data centers could generate momentum for legislation limiting dangerous AI systems. However, slowing construction in the U.S. does not necessarily slow global progress. Meta and other companies are exploring construction outside the U.S., including Google’s plan to invest $15 billion in Malaysia over two years. Chinese developers would face fewer restrictions, potentially allowing them to narrow the gap with American competitors. George Chen, a partner at The Asia Group, noted Huang "may also be viewed as a potential victim" if targeted without knowing who she was. China has denied the intelligence allegations, and Reuters could not independently verify them.
