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In a 257-word memo to employees, Nvidia Corp. Chief Executive Officer Jensen Huang left no doubt that the chip colossus was embroiled in a crisis like none before in its three-decade history.

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After months of reports about the CEO’s relationship with a suspected Chinese spy, Huang admitted on Sunday that he’d had an affair and said the Nvidia board was launching an investigation. Huang had previously said there was nothing inappropriate about his relationship with the woman, who worked for a Singapore-based customer.

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“I was unfaithful to my wife,” Huang, 63, said in the memo. “My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.”

The stunning admission intensified the controversy surrounding a company at the heart of the artificial intelligence market — a sector that’s already been rocked by concerns about a slowdown in data center spending. Nvidia makes chips that are crucial to AI computing equipment, and it’s one of the world’s most valuable companies.

Huang himself has been the AI field’s biggest cheerleader, drawing throngs of fans in what’s been called “Jensanity.” Wearing his signature leather jackets, he crisscrosses the globe to help promote the technology’s adoption — a shift he bills as a new industrial revolution. Nvidia also has emerged as a key source of financing for AI infrastructure. He has worked with some of Wall Street’s biggest firms on a $500 billion effort to help companies rapidly build out their equipment, and he’s funnelled money into bolstering the AI supply chain and fledgling customers.

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Though Huang will remain Nvidia CEO pending the results of the investigation, the incident marks a dramatic comedown for an AI evangelist at an already delicate moment.

“It is hard not to read the news over the weekend as negative given it brings the stewardship of one of America’s most important companies, and the architect of the US AI trajectory, under debate, as well as calling judgment into account,” Bernstein analyst Stacy Rasgon said in a note.

To investigate the case, the Nvidia board is assembling a committee of independent directors, who will work with outside counsel, according to a statement Sunday. A perpetual futures contract on the Hyperliquid blockchain referencing Nvidia’s share price fell about 2.9 per cent in the wake of the announcement.

The probe follows a series of reports that Nvidia’s leader was targeted by former Megaspeed International executive Alice Huang, who the U.S. government suspects was recruited by a Chinese spy agency. The CEO previously said he had a “normal” business relationship with the woman, who is no longer at Megaspeed.

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The board investigation will address reports that the chip magnate “has been the target of a foreign intelligence effort,” the company said. “While the board has no reason to believe that either national security or Nvidia secrets were compromised, the board’s inquiry will examine all available information.”

In his memo, Huang said he will support the investigation. “I love our country and our company, and I am committed to protecting Nvidia and supporting America’s national security,” he said.

Nvidia’s co-founder — a leader famous for his hands-on and tireless management style — built the maker of graphics cards into arguably the world’s most important technology company. Nvidia’s highly prized accelerator chips are used to develop and run AI models, and Nvidia has branched out into related fields, including computers, networking and software.

Huang also has been a leading voice trying to calm fears about AI technology slipping out of human control. He has dismissed the need for the AI labs to slow down their work to ensure it doesn’t threaten humanity — even at a time when industry leaders such as Dario Amodei and Sam Altman have endorsed such an idea. He’s also argued that new regulations are unnecessary.

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The Santa Clara, California-based company has no public succession plan, and there is no obvious heir apparent for Huang. He has repeatedly said he wants to continue in his role for decades and has created an informal organizational structure around him that eschews a conventional hierarchy. Instead, his direct reports are tasked with rapidly implementing his decisions.

Huang has said that this system gives his company the flexibility to react to rapid changes in technology and remain agile. But it’s also created a situation where there’s no replacement ready to step in and take over Huang’s relentless schedule.

The latest revelations “highlight the considerable key man risk that Nvidia faces,” Rasgon said. “Nvidia is not an ordinary company and Jensen is not an ordinary CEO; he IS Nvidia, clearly sets the long term strategy and direction, and (with supposedly 60 direct reports) pulls most of the company’s strings himself.”

Concerns that sensitive information might leak via Nvidia’s contacts with China have fueled calls for investigations and greater scrutiny of Huang and the company, ratcheting pressure in what has already been a difficult geopolitical balancing act. While Nvidia is allowed to ship a limited range of products to China under a licensing program granted by the current Trump administration, Beijing has restricted imports of the chips — an impasse that continues to curb the chipmaker’s sales in the world’s second-largest economy.

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Huang has long sought to sell more of Nvidia’s AI processors in China, the largest market for chips. He’s argued that Nvidia and its peers should be allowed to serve the region to keep their products central to the development of AI. Closing off the market will risk turning China into a more powerful, independent force in artificial intelligence, he has said.

Investors have poured money into Nvidia, which reports earnings later this month, betting it will continue to be the main beneficiary of runaway spending on AI infrastructure.

The company reached a record market capitalization of nearly $5.8 trillion in October. That has slipped below $5 trillion, however, weighed down by concern about the sustainability of AI infrastructure build-out.

Megaspeed, based in Singapore, has been accused of breaking US export restrictions and smuggling Nvidia chips to China. Huang had told Bloomberg that his contacts with Megaspeed employees were typical of business relationships he has with many Chinese customers and executives.

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Read Jensen Huang’s full memo

Subject: A message to our company

I owe my family and all of you an apology.

I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.

Throughout my life, my family has given me love and support. They deserve my honesty and loyalty. Instead, I let them down and damaged the life we built together. I take full responsibility for what I did and the hurt I caused, and I accept the criticism that comes with it.

To my wife and family: I love you. I know an apology cannot undo what I have done. I hope our family will heal and that, over time, I can earn back your trust.

To my colleagues at NVIDIA, including those I have worked alongside for decades, and to our board, partners, and shareholders around the world: you deserve better from me.

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Leading NVIDIA is the privilege of my life. My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to NVIDIA and will work to earn back your confidence.

Regarding the national security concerns raised in news reports, NVIDIA’s Board of Directors has initiated an independent investigation. I support the investigation and will cooperate fully. I love our country and our company, and I am committed to protecting NVIDIA and supporting America’s national security. I am proud and grateful to be an American.

My family bears no responsibility for my choices. I do. Please give them privacy.

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