On Monday morning, traders in New York watched a number they had not expected to see. The world’s most valuable chipmaker was falling — fast — while almost everything else on their screens was climbing.
By the closing bell, Nvidia had lost 4.3% of its value. Around $190 billion in market value had simply vanished in a single session, according to Reuters.
The trigger was not a bad earnings report. It was not a failed product or a rival’s breakthrough. It was a scandal swirling around the company’s chief executive — and a lawsuit that landed five minutes after trading stopped.
What Happened When Nvidia Shares Fell
Nvidia shares fell sharply from the opening bell. At their lowest point on Monday, they were down roughly 8% — nearly a tenth of the company’s value gone before lunch.
The stock recovered some ground during the afternoon but still closed at $178.67, down from Friday’s close of $186.64, according to Yahoo Finance figures cited by Decrypt.
The scale of the loss is hard to grasp. The $190 billion wiped out on Monday is more than the entire market value of most companies on the S&P 500.
For Jensen Huang personally, the damage was immediate too. Forbes’ real-time billionaire tracker showed his net worth falling by about $7.4 billion within the first half-hour of trading.
Huang holds roughly 3.6% of Nvidia, according to Reuters, citing LSEG data. When the stock moves, his fortune moves with it — and on Monday, both moved hard in the wrong direction.
The Lawsuit Filed Five Minutes After the Bell
Five minutes after the market closed, the next blow landed. Shareholders led by Mark Kistenmacher filed a proposed class-action lawsuit in federal court in San Jose, California, Reuters reported.
The complaint accuses Nvidia and Huang of misleading investors by concealing the alleged relationship and the national security questions around it.
It seeks to represent investors who bought Nvidia shares between October 9, 2025, and November 8, 2026, and alleges violations of US securities law.
The suit claims the company’s public statements about its dealings with Megaspeed, a Singapore-based Nvidia customer, were misleading and kept the share price artificially high.
None of the allegations has been tested in court. Shareholder lawsuits after a sharp share-price fall are common, and an accusation in a complaint is not a finding of wrongdoing.
Who Is Alice Huang — and What Is Alleged?
At the centre of the story is Alice Huang, a former executive at Megaspeed, a Singapore data-centre company that buys Nvidia chips. She is not related to Jensen Huang.
The New York Times reported on October 29 that US intelligence agencies had concluded Alice Huang was a Chinese intelligence asset.
The Financial Times reported on Saturday that US intelligence had identified her as an agent of China’s Ministry of State Security, recruited to gather information on the Nvidia chief.
According to the Times, Huang told Nvidia’s board that he had been intimate with Alice Huang. Reuters reported that he admitted the affair and told employees he had been unfaithful to his wife.
US officials have also investigated whether she was involved in moving Nvidia’s advanced AI chips into China, according to the reports.
That detail is what turns a personal scandal into a national security question. Megaspeed is not a random company — it is a customer of Nvidia, and the flow of advanced AI chips to China is one of the most sensitive issues in US technology policy.
The New York Times also raised separate questions about whether the US Commerce Department had allowed the sale of Nvidia’s H200 AI chip to a company linked to a sanctioned Chinese private equity fund.
The Board’s Investigation and What Nvidia Has Said
Nvidia’s board moved on Sunday, announcing an independent investigation led by independent directors with outside legal counsel.
The board said it had no reason to believe national security or company secrets had been compromised, according to the reports.
That statement has not settled the matter. The investigation is still under way, and the shareholder lawsuit now adds a legal front to a crisis that began as a reputational one.
The episode also puts a spotlight on Huang’s lobbying in Washington, where he has pushed for Nvidia to be allowed to sell its most advanced chips in China — a campaign now facing fresh scrutiny.
Why Nvidia Fell Alone While the Market Rose
What made Monday so striking was not just the size of the fall, but the fact that Nvidia fell alone.
The Dow Jones rose 2.15%, the S&P 500 gained 2.35% and the Nasdaq climbed 2.74% on the same day. Even the Philadelphia Semiconductor Index jumped 6.86% as bargain hunters stepped in.
Investors were buying chip stocks across the board — except the biggest one. The sell-off was about Nvidia specifically, not the sector.
The contrast underlines how much of Nvidia’s value now rests on confidence in its leadership. Huang is not just the chief executive; he is the public face of the AI boom.
That same day, Nvidia had also been celebrating a very different story: the unveiling of GR00T 2, its new robot foundation model that learns by watching humans. The contrast between the two headlines could hardly be sharper.
The company’s dominance in AI chips remains intact. Google’s new TPU chips are challenging it, but Nvidia still leads the market by a wide margin.
What Happens Next for Nvidia
The immediate test comes on November 17, when Nvidia reports earnings. Investors will be watching both the numbers and what Huang says about the investigation.
The board’s inquiry, the shareholder lawsuit and any further action from US authorities will each take months to play out.
The wider AI sector has been riding extraordinary valuations — Anthropic is reportedly targeting a $1 trillion IPO — which makes any crack in confidence costly. When expectations are this high, trust becomes part of the share price.
For now, the shares were roughly flat in premarket trading on Tuesday, at about $179.70, suggesting the panic of Monday has paused — but not that the questions have gone away.
Nvidia is still worth more than $4.3 trillion, still the world’s most valuable chipmaker, and still the company at the centre of the AI revolution.
But Monday showed something new about the AI era’s biggest winner. Its greatest risk may no longer be a rival chip or a supply shortage. It may be trust — and how quickly $190 billion of it can disappear.
For the full picture of the lawsuit and the market reaction, see the Reuters-based report on the shareholder lawsuit.
