Microsoft overtakes Nvidia as 2nd-most valuable firm amid Jensen Huang probe

Microsoft has overtaken Nvidia to become the world's second-most valuable company after Nvidia shares plunged more than 6 per cent on Tuesday, deepening investor concerns over the future of the artificial intelligence boom and fresh scrutiny surrounding CEO Jensen Huang.Microsoft shares were down about 0.4 per cent at USD 543.25, while Nvidia fell more than 6 per cent to around USD 167.11. The sharp move erased hundreds of billions of dollars from Nvidia's market value and pushed the chipmaker below Microsoft in the global rankings for the first time since June 2025.The fall was not driven by a single factor. Investors were already questioning whether the enormous spending on AI infrastructure would translate into returns large enough to justify soaring valuations. Those concerns were compounded by reports surrounding Huang and his links to a Chinese businesswoman who has come under scrutiny from US authorities.NVIDIA FACES $470 BILLION TWO-DAY WIPEOUTNvidia shares had already dropped 4.3 per cent on Monday. With Tuesday's losses added, the company was on track to lose more than USD 470 billion in market value across two sessions. That is a striking reversal for a company that became one of the biggest winners of the generative AI boom. Nvidia's powerful graphics processing units, or GPUs, have become the backbone of the data centres being built by technology giants to train and run AI models.For years, investors treated Nvidia as one of the clearest ways to profit from the AI revolution. But the latest sell-off shows that confidence is no longer unconditional. The immediate question for investors is whether Nvidia's troubles remain confined to the company or become part of a wider reassessment of AI-related spending.HUANG'S PERSONAL TIES UNDER SCRUTINY The pressure on Nvidia intensified after reports about Jensen Huang's relationship with Alice Huang, a Chinese businesswoman also known as Huang Le. The two are not related.The Information reported that Alice Huang's network helped facilitate shipments of at least USD 7.5 billion worth of Nvidia chips to Chinese companies. The report has raised questions about Nvidia's export-control compliance and corporate governance.Nvidia's board launched an internal investigation on Sunday after reports that Jensen Huang may have been targeted by a foreign intelligence operation. The FBI is also examining the matter, although details about the investigation remain limited. US President Donald Trump said on Monday that the FBI was looking into the issue but did not provide further information.Huang, 63, acknowledged that he had been unfaithful to his wife but did not provide details about the relationship. He has also said he remains committed to supporting US national security. The allegations, however, have not established that Nvidia or Huang knowingly violated US export controls or that company secrets were compromised.WHO IS ALICE HUANG?Alice Huang built her career in Chinese finance before becoming involved in the highly competitive global market for AI computing hardware.According to corporate records and other documents reviewed by Reuters, she previously held senior positions at Shanghai Hexi Investment Management. Posts published by the company identified her as a deputy general manager, executive director and member of its investment decision committee. Records also linked her earlier career to HSBC's private bank in Hong Kong and CITIC Securities.Her profile changed significantly when she became the controlling shareholder of Singapore-based cloud computing company Megaspeed International in March 2023, according to research by C4ADS.Megaspeed has been listed by Nvidia as an official cloud partner in the Asia-Pacific region.The company later attracted attention from US authorities over suspicions that it may have helped Chinese customers obtain advanced Nvidia chips that were subject to US export restrictions. However, there has been no public finding that Megaspeed violated those rules.Reuters also found that Megaspeed's Indonesian subsidiary imported Nvidia hardware between 2024 and 2026, including H100 processors and related components. Such shipments to Indonesia, by themselves, do not establish a violation of US export controls.HOW THE CHIP TRAIL LED TO CHINAThe Information reported that Alice Huang was connected to a network of companies operating across China and Singapore that acquired Nvidia chips. At the centre of the network was Shanghai Century Litong, which reportedly obtained preferred cloud-partner status with Nvidia in 2023. That status gave the company priority access to Nvidia chips.According to the report, when orders for chips affected by US export restrictions became difficult to fulfil, Alice Huang used relationships with Nvidia and its distributors to secure supplies.The Information estimated that around 240,000 H100, H200 and some A100 chips were moved into China.Some of the computing capacity was reportedly used by major Chinese technology companies, including Alibaba and Tencent, as well as smaller AI laboratories. These allegations have intensified the debate around the enforcement of US restrictions designed to prevent China from obtaining the most advanced AI chips.- Ends