The co-founder and CEO of Nvidia, Jensen Huang, resigned on Thursday, triggering a sharp drop in the company's stock.
Huang's exit follows intimate relationships with an alleged Chinese spy, Alice Huang, Nvidia's Vice President of Healthcare, Kimberly Powell, and a second unnamed employee.
The board has appointed Nvidia's Vice President and Chief Financial Officer, Colette Kress, as interim CEO until a permanent successor is elected.
United States Commerce Secretary Howard Lutnick, meanwhile, faces scrutiny amid fallout from the scandal involving Huang, according to Reuters.
White House officials are discussing his possible removal, even as lawmakers criticised Lutnick for failing to tighten restrictions on AI chip exports to China and blacklist Chinese companies.
On Thursday, the Chinese government stated that China’s sci-tech progress relies on independent innovation and open cooperation.
"The U.S. should stop fabricating the 'Chinese spy' narratives as a pretext for imposing technology restrictions," said Foreign Ministry spokesperson Mao Ning.
Mao also stated that she wasn't "familiar" with information about Alice's reported presence in Beijing with Chinese security officials' knowledge.
Alice founded Megaspeed, a Singapore-based cloud computing and AI data centre company, which has imported more than $4.6 billion in Nvidia products.
Nvidia CEO Huang resigns as US Commerce Secretary faces scrutiny