Nvidia Loses $657 Billion in Market Value as Jensen Huang Scandal Deepens Into National Security Crisis

Nvidia founder Jensen Huang's resignation Thursday has erased nearly $657 billion in market value over the week, leaving the chipmaker still valued at roughly $4 trillion but facing its worst crisis in 33 years. CFO Colette Kress has been named interim CEO, and Nvidia's board has approached Arm CEO Rene Haas as a potential permanent successor, with prediction markets placing Haas at 34% odds ahead of Nvidia's Ian Buck at 30%. Huang's departure came after he admitted to an affair with Alice Huang, a Chinese businesswoman whose Singapore-based firm Megaspeed is at the center of a chip-diversion probe, as well as alleged affairs with two company employees. Trump had personally called Huang and urged him to fight to retain his position, but the resignation proceeded.

The scandal has drawn Washington into an escalating blame game. Treasury Secretary Scott Bessent said on CNBC that Treasury, the State Department, the War Department and the USTR had all backed placing Megaspeed on the export control entity list for months, but that Commerce Secretary Howard Lutnick's department never acted. Bessent asked publicly whether Nvidia knew its clients and aimed to stop chip leaks, calling any diversion of advanced chips "very frustrating." Lutnick agreed to testify voluntarily before the Senate Banking Committee on December 10, summoned by Chair Tim Scott. Bloomberg separately reported that a company Alice Huang founded obtained US-restricted Nvidia chips that were installed at a Shanghai data center, and Reuters identified more than $3 billion in Chinese AI projects built on restricted Nvidia hardware. Lutnick now faces growing calls within the White House for his ouster.

US intelligence officials told CNN they are not convinced Alice Huang was knowingly spying for China, calling the spy label "not entirely accurate and over-torqued." Attorney General Todd Blanche said no conclusions have been reached. Trump himself said Thursday it depended on whether she was a spy and called Huang "a fine man" who would "end up on his feet." The FBI has been investigating Megaspeed since at least 2024 over suspected diversion of restricted chips. Megaspeed's revenue jumped from zero to nearly $300 million in 12 months according to filings, and its assets surged from $32 million to almost $3 billion over the same period, while its offices in Singapore and Malaysia were found empty by reporters.

Markets sold off sharply Friday, with the Nasdaq 100 falling 2.4% to an intraday low and the S&P 500 dropping 1.1%. Semiconductors as a sector fell roughly 6%, AMD lost more than 10% and Broadcom shed around 6.6%. The selloff was compounded by a hot October PPI reading of 6.5%, its highest since November 2022, pushing the 10-year Treasury yield above 5% and driving markets to price a roughly 92% chance of a Fed rate hike in December. Bank of America now forecasts three consecutive 25 basis-point hikes in December, January and March. Chinese AI stocks fell sharply on fears that Huang's exit will bring tougher chip export curbs, with Z.AI down 10.3% and Alibaba off 3.8%.

On Ukraine, US envoys Steve Witkoff and Jared Kushner met President Putin in Moscow then President Zelensky in Dublin, and confirmed agreement on what would be the largest prisoner-of-war exchange of the conflict. Putin agreed to European participation in the next round of talks, though the Kremlin said Europe must demonstrate readiness before that happens. National security advisers from the EU and five powers, Germany, France, the UK, Italy and Poland, are set to represent Europe. Leaked Russian proposals discussed in Abu Dhabi, reported by Bild, demand Finland leave NATO, an end to NATO bases in the Baltic states, full Russian control of occupied Ukrainian territory and all of Donbas, and permanent Ukrainian neutrality, in exchange for withdrawing nuclear weapons from Belarus and troops from Transnistria. Finland flatly rejected the NATO demands, calling them non-negotiable. German Chancellor Merz urged Trump not to spring surprises in expected China-based talks with Putin.

In the Iran theater, the IRGC claimed to shoot down a US Army MQ-1 drone above Kuhestak near the Strait of Hormuz, releasing wreckage images that remain unverified independently. The IRGC also launched two one-way attack drones toward Bahrain and claimed to have struck a US early-warning radar there; CENTCOM denied any damage, saying both drones were intercepted with no injuries. Israeli Prime Minister Netanyahu is pressing Trump to resume military strikes against Iran, with Mossad chief Roman Gofman in Washington meeting CIA Director John Ratcliffe and expected to travel to Miami to meet Witkoff. Trump has so far declined, maintaining the naval blockade. Brent crude was near $96 and WTI near $88, with oil adding around 3% Thursday on Trump's statement that the US would strike Iran with no hesitation if it threatened US allies or naval vessels.