Nvidia's board launches investigation into CEO Jensen Huang's affair with alleged Chinese spy

Nvidia's ( NVDA ) board is launching an independent investigation into reports that a woman CEO Jensen Huang was having an affair with was allegedly spying on him for the Chinese government.

In a email to employees Sunday, Huang admitted to having an extramarital affair.

"I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry," Huang wrote.

"To my colleagues at Nvidia, including those I have worked alongside for decades, and to our board, partners, and shareholders around the world: you deserve better from me. Leading Nvidia is the privilege of my life. My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to Nvidia and will work to earn back your confidence," the CEO added.

In a statement Sunday, the board said it "a committee of independent directors, assisted by outside independent counsel, will oversee the investigation" into the matter.

"While the Board has no reason to believe that either national security or NVIDIA secrets were compromised, the Board's inquiry will examine all available information," the board said statement.

The revelations come after reports of ties between Huang and a woman believed to be passing information to the Chinese government.

Last month, the New York Times reported the US intelligence service believed a Chinese national named Alice Huang, a former leader at Megaspeed, an Nvidia chip customer, and someone with a well-documented relationship with Huang himself, may have acted as an intelligence asset , sharing information with the ruling party in Beijing.

Yorkville Ives partner and senior managing director Dan Ives wrote in a note to investors on Sunday that the investigation is a "black eye" for Huang and will likely spark multiple congressional investigations.

"The key question investors will be asking is: Will Jensen remain CEO of Nvidia?….The investigation will be key and we would expect Jensen to continue in his role as CEO with no interruption in the near-term," Ives wrote.

"There is clearly risk that Jensen could be removed as CEO depending on the Board investigation and this will add risk to the stock as he is so important to the Nvidia story and strategy globally. This will also increase major scrutiny regarding selling chips to China which remains a key battleground issue in DC," he added.

The US government banned the sale of Nvidia's advanced AI chips to China, though the company has lobbied to continue offering the hardware saying it is better if the world uses processors from a US business.