Nvidia's governance crisis over CEO affair and spy allegations stuns experts

Nvidia's stock fell 9.5% over two days amid a governance crisis involving CEO Jensen Huang's admitted affair with a former executive suspected of spying for China, leaving experts without precedent for the situation. The board hired law firm Wachtell, Lipton, Rosen & Katz to investigate, with experts noting the probe's thoroughness depends on directors' incentives. Key questions include whether laws were broken, internal policies violated, or the board misled, particularly regarding what Huang knew about the alleged spy. Experts expect shareholder lawsuits, including securities fraud claims already filed, while noting Huang's lack of voting control makes him easier to remove. The company faces additional scrutiny over nepotism, with Huang's children employed at Nvidia and no clear succession plan.