Nvidia’s independent directors on Tuesday hired Joon H. Kim, a former top federal prosecutor in Manhattan, to investigate whether the chief executive, Jensen Huang, was the target of a foreign intelligence effort.
Mr. Kim and his firm, Wachtell, Lipton, Rosen & Katz, will conduct “a thorough and independent investigation as was announced on Sunday,” according to a one-sentence statement from the board’s independent members. It gave no timeline.
Investors haven’t waited for the findings. Nvidia’s shares fell 6% on Tuesday, after dropping more than 4% on Monday, CNBC reported, on fears that the scandal could push out the company’s co-founder. The inquiry will examine whether national security or company secrets were compromised.
The board opened the investigation on Sunday, the same day Mr. Huang told employees in a memo that he had had an extramarital affair. He didn’t name the woman. At the center of the case, Business Insider reported, is Alice Huang, an executive at Megaspeed International, a Singapore-based cloud computing company and Nvidia customer. The New York Times reported last month that U.S. intelligence officials believed she was spying for the Chinese government. The two aren’t related.
“I was unfaithful to my wife. My actions hurt her and our children,” Mr. Huang wrote. “There is no excuse for what I did.” He said he supported the inquiry. “I love our country and our company. I am committed to protecting NVIDIA and supporting America’s national security.” A company spokesperson said he planned to stay on as chief executive without interruption.
In its Sunday statement, the board said it had “no reason to believe that either national security or NVIDIA secrets were compromised,” CNBC reported, but would “examine all available information.” A week earlier, Mr. Huang had told Bloomberg that his dealings with Alice Huang were business and “completely normal and not unusual.” John Rizzo, Nvidia’s head of public policy communications, told The Times that “meetings with customers are part of a C.E.O.’s job.”
Mr. Kim joined Wachtell last month after nearly a decade at Cleary Gottlieb Steen & Hamilton, according to Business Insider. As acting U.S. attorney for the Southern District of New York in 2017 and 2018, he oversaw more than 220 assistant U.S. attorneys whose cases included economic espionage. Earlier, as a line prosecutor there from 2000 to 2006, he helped convict Peter Gotti, the brother of John Gotti.
In 2021, Letitia James, the New York attorney general, appointed him to co-lead the inquiry into sexual harassment accusations against Gov. Andrew M. Cuomo. It found that Mr. Cuomo had harassed multiple women. He resigned.
Wachtell, founded in 1965, represented Twitter when it sued Elon Musk in 2022 to force through his $44 billion purchase. The NBA has twice hired it for investigations. The first, in 2021, ended with Robert Sarver, then the Phoenix Suns owner, suspended for a year and fined $10 million. The second led the league in September to fine the Los Angeles Clippers $30 million and suspend their owner, Steve Ballmer, for a year.
The questions reach into Washington. The Times reported on Sunday that Secretary of State Marco Rubio oversaw a highly classified memo this spring warning about Mr. Huang’s relationship with a Chinese spy, based on electronic surveillance of Alice Huang, who was under investigation over illegal shipments of Nvidia chips to China. The paper also reported that the Commerce Department paused its inquiry into Megaspeed and handed it to the Justice Department after Tim Teter, Nvidia’s general counsel, contacted Commerce agents and said Jeffrey Kessler, then the department’s under secretary for industry and security, had approved it. That contact alarmed the agents, The Times reported. Lawmakers had already pressed Mr. Huang for answers.
President Trump said he called Mr. Huang on Monday and was told the executive had “no idea” the woman was a Chinese spy. “And I really believe him,” Mr. Trump told reporters.
Mr. Kim’s findings will go to a board with no chair. Nvidia has a lead independent director instead, and two directors, Tench Coxe and Harvey Jones, have served alongside Mr. Huang since 1993, The Next Web reported, citing the company’s proxy statement. The board said Sunday that it would “provide further updates as appropriate.”