Nvidia shares fell to $172.37 after CEO Jensen Huang admitted to an affair. On Sunday, the board started an independent probe into reports that Huang was the target of a foreign intelligence effort. The company said, "While the Board has no reason to believe that either national security or NVIDIA secrets were compromised."

The stock fell to $172.37 shortly after Wall Street opened, hitting a multi-month low as investors assessed the potential implications for Huang's leadership at one of the world's most valuable companies.

Nvidia shares have faced sustained selling pressure in recent months. At $177.77 on November 9, the stock had declined 22.47% over the past month, wiping $51.51 off its share price.

Over six months, the AI chipmaker's shares had fallen approximately 17.4%, from $215.20 in May.

Last month, The New York Times reported that Huang had developed a close relationship with a Chinese businesswoman suspected by US intelligence agencies of passing information to Beijing.

Huang later admitted to Nvidia employees that he had been unfaithful to his wife.

On Sunday, Nvidia's board announced an independent investigation following reports that its founder and CEO had been the "target of a foreign intelligence effort".

A committee of independent directors, supported by outside legal counsel, will oversee the inquiry.

"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 company said.

The board added that Huang "fully supports the review and has committed to cooperating with it."

Huang will continue serving as CEO during the investigation.

China rejects spying allegations

According to NYT, US intelligence agencies identified Alice Huang, a Chinese citizen and business executive associated with Singapore-based data centre company Megaspeed, as someone allegedly gathering information for Beijing.

China rejected the charge. "The so-called claim of ‘Chinese spies’ is completely groundless and is nothing but a smear against China," China's foreign ministry spokesperson Guo Jiakun said.