Nvidia Slips Behind Microsoft as Investor Confidence Faces a Fresh Test

Microsoft has overtaken Nvidia to become the world’s second-most valuable company after a sharp decline in Nvidia’s share price intensified investor concerns over artificial intelligence spending and fresh scrutiny surrounding CEO Jensen Huang.

Microsoft shares fell around 0.4% to $543.25 on Tuesday, while Nvidia dropped more than 6% to approximately $167.11. The sell-off wiped hundreds of billions of dollars off Nvidia’s market capitalisation, pushing the chipmaker below Microsoft in the global rankings for the first time since June 2025.

The decline reflects growing concerns about whether massive investments in AI infrastructure will generate returns sufficient to justify the sector’s high valuations. These worries have been compounded by reports surrounding Huang’s relationship with a Chinese businesswoman who has attracted the attention of US authorities.

Nvidia shares had already fallen 4.3% on Monday. With Tuesday’s losses, the company was on track to lose more than $470 billion in market value over two trading sessions. The development marks a significant shift for Nvidia, which has been among the biggest beneficiaries of the generative AI boom. Its graphics processing units (GPUs) have become essential for technology companies building data centres to train and operate AI models.

However, investors are increasingly questioning whether the pace of AI infrastructure spending can be sustained and whether the returns will match the enormous capital commitments made by technology companies.

The pressure on Nvidia has also increased following reports about Jensen Huang’s relationship with Alice Huang, a Chinese businesswoman also known as Huang Le. The two are not related.

According to The Information, Alice Huang’s network helped facilitate shipments of at least $7.5 billion worth of Nvidia chips to Chinese companies. The report has raised questions about export-control compliance and corporate governance.

Nvidia’s board launched an internal investigation on Sunday following reports that Jensen Huang may have been targeted by a foreign intelligence operation. The FBI is also examining the matter, although details remain limited. US President Donald Trump confirmed on Monday that the FBI was looking into the issue.

Huang, 63, acknowledged that he had been unfaithful to his wife but did not disclose details of the relationship. He has maintained his commitment to supporting US national security. However, the allegations have not established that Nvidia or Huang knowingly violated export restrictions or that company secrets were compromised.

Alice Huang built her career in Chinese finance before entering the global AI computing market. According to corporate records reviewed by Reuters, she previously held senior positions at Shanghai Hexi Investment Management. Her professional background also reportedly included roles at HSBC’s private bank in Hong Kong and CITIC Securities.

Her profile changed in March 2023 when she became the controlling shareholder of Singapore-based cloud computing company Megaspeed International, according to research by C4ADS. Nvidia has listed Megaspeed as an official cloud partner in the Asia-Pacific region.

The company subsequently attracted scrutiny from US authorities over suspicions that it may have helped Chinese customers access advanced Nvidia chips restricted under US export controls. However, no public finding has established that Megaspeed violated these rules.

Reuters also found that Megaspeed’s Indonesian subsidiary imported Nvidia hardware between 2024 and 2026, including H100 processors and related components. These imports, by themselves, do not establish any violation of US export restrictions.

The Information also reported that Alice Huang was connected to a network of companies operating across China and Singapore that acquired Nvidia chips. One of the companies involved was Shanghai Century Litong, which reportedly secured preferred cloud-partner status with Nvidia in 2023, giving it priority access to chips.

According to the report, Alice Huang used her relationships with Nvidia and its distributors to secure supplies when orders for chips affected by US export restrictions became difficult to fulfil. The Information estimated that around 240,000 H100, H200 and 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.

The allegations have added to concerns over the enforcement of US restrictions intended to prevent China from accessing advanced AI chips. For Nvidia, the combination of regulatory scrutiny, questions over AI spending and investor uncertainty has created fresh pressure on its market position.