Nvidia has lost roughly $430 billion in value over two days following revelations regarding Chief Executive Jensen Huang.

The drop occurred after the tech giant announced an independent investigation into claims that Huang was the target of a foreign intelligence campaign.

The claims stem from his extramarital relationship with Alice Huang, a former executive at Singapore-based data centre firm Megaspeed whom US officials believe is a spy for China. The drop pushed Nvidia out of its spot as the world’s most valuable publicly traded company, with Microsoft taking over the top position.

The fallout has escalated quickly. Nvidia’s board retained law firm Wachtell, Lipton, Rosen & Katz and former federal prosecutor Joon H. Kim to lead an independent probe. Republican Senator Kevin Cramer called on Huang to step down, citing security risks regarding sensitive AI semiconductor shipments. Shareholders have also filed a class-action lawsuit accusing the firm of concealing executive risks.

The crisis at Nvidia coincides with a broader downturn across the artificial intelligence sector. Investors have grown more cautious about high valuations, debt-fuelled infrastructure spending and questions over whether data centre investments will yield sustainable profits.

Following the US midterm elections, incoming lawmakers and state governors also face pressure regarding the energy and water demands of AI data centres creating new political hurdles. At the same time, AI model developers face headwinds, with reports that OpenAI delayed its stock market listing and market rumours suggesting offerings from firms such as Anthropic face high-risk ratings from investors.

For latest tech stories go to TechDigest.tv