By Steve Holland, Courtney Rozen, Karen Freifeld and David Shepardson
WASHINGTON, Nov 9 (Reuters) - US President Donald Trump said on Monday the FBI was looking into Nvidia CEO Jensen Huang's affair with a Chinese businesswoman alleged to be a spy for Beijing.
Trump said he "was amazed" by allegations about Huang, among the president's closest allies in Silicon Valley. Trump said he had spoken to the CEO, who told him that he had no idea that the woman was a spy.
"I know the FBI is looking into it,"
Trump said. "I think that he'll be in good shape," he added.
Nvidia shares closed down more than 4% on Monday after the company's board launched an internal investigation into whether Huang had been targeted by a foreign intelligence effort.
The probe, announced on Sunday, has put a spotlight on 63-year-old Huang's future given Nvidia's status as the world's most valuable chipmaker and the CEO's role as the most prolific salesman of the AI boom. Huang told Nvidia's employees that he had been unfaithful to his wife, without disclosing details of the relationship.
The leather-jacketed Huang enjoys rock-star status worldwide, particularly in Asia, where he often mingles freely with fans, taking selfies and signing autographs for his devoted followers.
He is Nvidia's fifth-largest shareholder with a roughly 3.6% stake, according to LSEG data, and keeps a tight grip on the company through an unusually flat structure in which dozens of executives report directly to him.
But unlike Mark Zuckerberg's Meta Platforms or Elon Musk's SpaceX, Nvidia has no dual-class shares that would give co-founder Huang majority voting control.
The New York Times reported that Trump was briefed on Huang's relationship with the woman and that she was giving information to the Chinese government, and that the president chose not to act on the information.
"The so-called Chinese spy narrative is purely a groundless accusation, slander, and a smear," Chinese Foreign Ministry spokesperson Guo Jiakun told reporters in Beijing.
Huang's relationship with Trump has coincided with several favorable policy developments for the company, and the president has lavished Huang with praise, awarding him the nation's highest honor for scientific achievement in October.
The same day Trump gave Huang the award, the president disclosed buying up to $1.6 million and selling up to $1 million of Nvidia shares during the summer.
'NOT AN ORDINARY CEO'
Nvidia said its board has confidence in Huang, thought by many on Wall Street to be the most important person underpinning the AI trade. Analysts acknowledged uncertainty around succession, but most do not expect the investigation to result in the longtime CEO stepping down.
"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 pulls most of the company's strings himself," said Stacy Rasgon, an analyst at Bernstein.
Nvidia shareholders were quick to sue Huang and the company in a proposed class action on Monday, accusing them of defrauding shareholders by concealing Huang's ties with a suspected Chinese spy.
Lawmakers and advocates told Reuters that Congress was more likely to pass legislation to tighten China's access to AI chips in light of news of Huang's relationship with a suspected Chinese intelligence agent.
US House of Representatives Democratic leader Hakeem Jeffries said on Monday that Congress needs more answers and called for the House to pass an annual defense bill that includes restrictions on chip sales to China.
The New York Times reported last month that Huang had a relationship with Alice Huang, an unrelated former executive of Singapore-based company Megaspeed, who US authorities investigated and concluded was a Chinese intelligence asset.
Megaspeed did not respond immediately to a request for comment on Monday, a public holiday in Singapore.
Alice Huang did not respond to the New York Times last month when it first reported her relationship with Huang, and Reuters could not determine her location to seek comment on Monday.
(Additional reporting by Kyu-seok Shim and Heekyong Yang in Seoul, Tom Westbrook in Sydney, Roger Tung and Ben Blanchard in Taipei, Danilo Masoni in Milan and Aditya Soni in Bengaluru; Writing by Brenda Goh and Sayantani Ghosh; Editing by Ed Davies, Jamie Freed and Arun Koyyur)
