New York:Shares of Nvidia, the American chipmaker, fell by 6.4% to $174.7 following the launch of an independent investigation by the company's board into reports of CEO Jensen Huang being targeted by a foreign intelligence operation.

According to Anadolu Agency, the decline in stock prices resulted in a reduction of approximately $325 billion in Nvidia's market capitalization at the start of trading. The board's decision to initiate the inquiry came after reports surfaced regarding Huang's connection with Alice Huang, an executive at MegaSpeed, who is suspected by US officials of providing information to Beijing.

An independent directors' committee, with the assistance of outside legal counsel, will oversee the investigation, as stated by Nvidia. The board indicated that Jensen Huang is supportive of the review and has committed to cooperating fully. While the board emphasized that there is currently no evidence suggesting a compromise of US national security or Nvidia's confidential data, the inquiry will cover all relevant information.

Nvidia's directors also affirmed their confidence in Huang and his leadership, promising further updates as needed. Reports from the New York Times and Financial Times have highlighted allegations that Alice Huang may have been involved with Chinese intelligence, raising concerns about the personal relationship's impact on Nvidia.

In response to these allegations, China dismissed them as unfounded speculation and defamation. At a briefing in Beijing, Foreign Ministry spokesperson Guo Jiakun labeled the spy claims as baseless.

This investigation places the leadership of a key player in the global AI industry under scrutiny, as Nvidia's chips are crucial to the infrastructure supporting AI development and implementation. Nvidia is set to announce its third-quarter financial results on November 17.