By Mike Scarcella
WASHINGTON, Nov 11 (Reuters) - Nvidia has become the latest company in crisis to turn to Wall Street law firm Wachtell, Lipton, Rosen & Katz, as the chipmaker faces fallout from reports
that CEO Jensen Huang had an affair with a businesswoman alleged to be a spy for China.
Nvidia's board said on Monday that it selected Wachtell, a small but elite Manhattan firm that has long earned top fees advising on big mergers and fierce takeover fights, to conduct "a thorough and independent investigation" into the matter.
The investigation will be led by Joon Kim, a former top federal prosecutor who joined Wachtell last month from a rival firm. Kim was second-in-command under former Manhattan US Attorney Preet Bharara during Democratic US President Barack Obama's administration.
The New York Times reported last month that Huang had a relationship with Chinese national Alice Huang, an unrelated former executive of Singapore-based company Megaspeed. US authorities investigated her and concluded she was a Chinese intelligence asset.
Jensen Huang has since admitted to having an extramarital affair. Reuters could not independently verify the intelligence allegation, which China has denied.
Nvidia has said Huang will cooperate with the probe and is committed to continuing to lead the company. The controversy has raised questions about the company's governance and its dependence on the CEO who has led it for more than three decades and built it into the dominant supplier of AI chips.
Kim and a Wachtell spokesperson did not immediately respond to requests for comment.
Nvidia did not give a timetable for the investigation or say whether its findings would be made public. Such probes can take weeks or months, and can lead to governance changes, actions against executives, additional oversight measures or other corrective steps.
Best known for its M&A practice and for handling high-stakes lawsuits, Wachtell has done work for clients including ChatGPT maker OpenAI, Goldman Sachs, Salesforce, Capital One, Coinbase, Abbott Laboratories and CVS. The National Basketball Association hired Wachtell to investigate alleged workplace misconduct at the Phoenix Suns basketball organization following a 2021 news report.
Among its recent cases, Wachtell squared off in a California trial this year against billionaire entrepreneur Elon Musk, who alleged the law firm's client OpenAI strayed from its mission to benefit humankind. A jury ruled against Musk in May.
The firm, founded in 1965, built its reputation partly by helping boards fight off corporate takeovers, including with the so-called poison pill, a strategy also called a shareholder rights plan that was conceived by founding partner Martin Lipton in the 1980s.
Public memos on corporate governance and the law published by Wachtell have long commanded attention from lawyers and boards of directors. In one from 2010, Lipton said internal investigations "can take on a life of their own" and advised against "open-ended, costly investigations that exacerbate rather than alleviate the crisis."
The firm, with a single New York office, has consistently been the most profitable US law firm in recent decades, with average profits per partner of more than $12 million last year, according to legal trade publication American Lawyer.
(Reporting by Mike Scarcella; Editing by David Bario and Will Dunham)
