From 2h ago Introduction: Nvidia hit by shareholder lawsuit Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The fallout over Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy is intensifying, after the AI chipmaking firm has been hit with a shareholder lawsuit. According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang’s alleged affair with Alice Huang , a former executive of Singapore-based Megaspeed , and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects.
The suit also claims that Huang’s failure to disclose the affair artificially inflated Nvidia’s share price, and could have violated federal securities laws, Politico reported. Nvidia’s share price took a knock yesterday – falling by 3.2% and cutting the company’s valuation by almost $200bn, to $4.3tn. Huang’s reputation has taken a serious knock, after he admitted being unfaithful to his wife following reports of an affair with Nvidia customer and alleged Chinese spy Alice Huang .
As Megaspeed has been accused of illicitly smuggling and diverting restricted Nvidia chips to China, the ramifications are serious. Donald Trump weighed in over the scandal yesterday, telling reporters: double quotation mark “I asked him [Mr Huang] about that and he said he had absolutely no idea that the person in question was a spy.” Trump also told a news conference that the US Federal Bureau of Investigation was involved in the case, saying: double quotation mark “We’ll look into it. I know the FBI is looking into it in terms of something else.” The agenda 8am GMT: Worldpanel UK supermarket inflation data From 9am GMT: Bank of England Watchers’ Conference in London 11am GMT: NFIB index of US business optimism 1.30pm GMT: US inflation report for October Key events 1m ago Vodafone cuts 3,000 jobs in cost saving drive 15m ago Reuters: Huang's woes evoke sympathy and disbelief in his birthplace Taiwan 24m ago Britons stockpiling water and food tins but not panic buying 51m ago Oil hits 10-week low on hopes US will not attack Iran again 2h ago Huang's presence in Trump delegation to APEC now 'in doubt' 2h ago Nvidia crisis: analysts question if Huang can survive 2h ago Chris Coons: must investigate if national security was compromised 2h ago Introduction: Nvidia hit by shareholder lawsuit Vodafone cuts 3,000 jobs in cost saving drive Mark Sweney Vodafone has cut 3,000 jobs across its European operation, as the telecoms company looks to make €2bn in cost savings by the end of the decade.
The UK-headquartered company said that the roles had been cut between April and September, helping to deliver €200m in cost savings. This included €50m from its UK operation where the company continues to focus on synergies after it bought out the 49% stake it did not already own in VodafoneThree . The company has said it expects to deliver £1bn in annual savings at VodafoneThree, the UK’s largest mobile operator, by 2032.
On Monday, the company announced a separate round of 2,300 job cuts in Germany, Vodafone’s biggest market, over the next two years. On Tuesday, the company raised its profit and cash flow guidance for the current financial year, after reporting that group-wide revenues increased 11.4% year-on-year in its first half. In the UK, revenue increased 10% to €4.9bn.
The company said it now expects earnings before tax to come in at €13.2bn to €13.4bn for the year, following a previous range of €13bn to €13.3bn. The cash flow estimate was upgraded from €2.8bn to €3bn. Vodafone reported 6.4% growth in adjusted earnings to €6.45bn for the first half.
Overall, the company reported a €3.6bn loss in the first half, after booking an almost €5bn impairment charge in Germany. “I am very happy about our overall group performance, but Germany is not yet where it needs to be,” said Della Valle . Vodafone’s share price dipped slightly on Tuesday, but is up almost 30% over the last year.
Reuters: Huang's woes evoke sympathy and disbelief in his birthplace Taiwan Photos of Nvidia CEO Jensen Huang and his wife, Lori Huang, along with their signatures, displayed at Yuchan Candied Fruit in Taipei, Taiwan. Photograph: Ann Wang/Reuters Nvidia CEO Jensen Huang is drawing both sympathy and disbelief in his birthplace Taiwan, where he has rock star status. Reuters reports that the dramatic revelations of his affair with a woman who could have been a Chinese spy have not dented Huang’s popularity. double quotation mark Shock at news that both Nvidia’s board and the FBI are investigating to determine if Huang was targeted by a foreign intelligence effort is palpable in the small Taipei businesses and restaurants he frequents on trips.
“I thought it must be a lie, or fake news,” said Hsiao Kui-yu, whose store selling dried and candied fruit is among Huang’s inevitable stops at Taipei’s Siping market. “We think of him as such a good boss, who takes such good care of people. How could something like this happen?
Is it possible? I’m very suspicious,” Hsiao, 68, told Reuters. Huang’s barber Ray Wang, whose high-end shop is just around the corner from the luxury hotel where Huang often stays, said the two formed a bond when the CEO first visited in 2017.
“Every day I pray for Mr. Huang, hoping he gets through this difficult time,” the 57-year-old added. “I really want to write him a letter of encouragement, but I feel this isn’t a good time, because he’s very busy.” Photograph: Ann Wang/Reuters Britons stockpiling water and food tins but not panic buying Julia Kollewe British shoppers have been stocking up on essentials such as bottled water, tinned goods and hand sanitiser, but did not panic buy after the government advised people to prepare for emergencies, shopping data has shown.
Sales of essentials jumped in the 10 days after the government launched its Be Ready campaign , which encourages households to prepare for up to three days in the event of disruption to essential services from incidents such as cyber-attacks or extreme weather. In the 10 days after the campaign launch, sales of hand sanitiser surged by 83% compared with the same period last year, while sales of bottled water rose 67% and tinned and jarred goods went up 37%, according to Worldpanel by Numerator’s monthly grocery report for Great Britain. The number of people buying tinned meat each day after the launch of the campaign rose by 43%, equivalent to an extra 400,000 shoppers a day, but the typical amount bought remained at about 500g in terms of pack size.
A senior US central banker is calling for a hike in interest rates next month. Federal Reserve governor Christopher Waller is arguing that the Fed should raise short-term borrowing costs next month even if government data shows inflation cooling. In remarks prepared for his speech at today’s Bank of England Watchers ’ Conference in London, Waller says: double quotation mark “While I am hoping for an improvement over September, even if this occurs, I would still support a 25 basis point increase in the FOMC’s policy rate at our December meeting.” Reminder: We get the October US inflation data at 1.30pm today.....
Here’s Lorraine Lanceley , partner in commercial and securities litigation at law firm Stewarts , on the class action case filed against Nvidia: double quotation mark “The affair itself is unlikely to be the central issue for shareholders. What matters is whether shareholders have suffered loss due to Nvidia failing to disclose material information, particularly given the sensitivities surrounding China, AI chips and US export controls. “US plaintiff lawyers will be looking closely at matters such as what Nvidia and its board knew and when, what was said publicly and whether any material information was withheld from the market.
For example, if previously undisclosed information is subsequently revealed to the market and may have caused investors significant losses, the ingredients for shareholder litigation could begin to emerge. But there is a considerable distance between reputational controversy and proving actionable shareholder claims.” Oil hits 10-week low on hopes US will not attack Iran again Oil has dropped to its lowest point since the end of August this morning, after Donald Trump declared the war in Iran is “effectively over”. Brent crude has dropped by 2.5% this morning, hitting $90.16 a barrel.
Traders were encouraged that Trump argued it was “highly unlikely” that the US would renew its attacks on Iran. He told reporters during a briefing at the White House: double quotation mark “At this point, taking the military action doesn’t seem to be a very necessary thing – but we’re locked and loaded, ready to go for any reason.” Oil has been falling steadily through November. It ended October above $117 a barrel.
Elsewhere in the AI world, Japan’s SoftBank has fallen into the red. SoftBank posted a loss of $7bn for the second quarter of this year, as it was hit by a $3.7 billion writedown over its US data-center projects and higher financing payments. The unexpected loss may stir fresh concerns over SoftBank’s huge bet on AI.
Chief Financial Officer Yoshimitsu Goto told an earnings conference that the company needs to “watch closely” the impact of the US midterm elections on AI sentiment. Asia-Pacific markets shrugged off the Nvidia scandal today, with AI-linked companies rallying. Japan’s Nikkei index gained 2.87%, adding to Monday’s gains, while South Korea’s Kospi jumped by 4.62%.
Chipmaker SK Hynix was among the big risers on the Kospi , up 6.7%. Huang's presence in Trump delegation to APEC now 'in doubt' The spy scandal could cost Jensen Huang a place on Donald Trump’s delegation to theAsia-Pacific Economic Cooperation summit in China next week. According to the South China Morning Post , Nvidia chief Jensen Huang had been in talks to join Trump on the trip, but his participation is now in doubt after he admitted his affair last weekend and Nvidia launched an investigation.
Other top US business leaders, including Tesla and SpaceX chief Elon Musk and Mastercard’s Michael Miebach , are expected to travel with Trump. The paper says: double quotation mark Sources told the SCMP that Musk, Miebach and Huang were among the executives the US president planned to bring to China. All three accompanied Trump on his state visit to Beijing in May.
Richard Partington Bank of England deputy governor Clare Lombardelli. Photograph: Graeme Robertson/The Guardian Away from the crisis at Nvidia, a deputy governor of the Bank of England has warned that young people in Britain are bearing the brunt of a “low-gear economy”. Clare Lombardelli told the Guardian that employers are holding back from hiring amid the fallout from the war in the Middle East.
But...that higher unemployment may not not necessarily bear down on inflation. If employers only hire for positions they found harder to fill, there will still be pressure to offer higher pay deals to recruit. Lombardelli explained: double quotation mark “You can have higher unemployment without it exerting a downward pressure on inflation.
So that’s obviously a problem.” She is expected to use a speech in London this lunchtime to warn that the breakdown in hiring in Britain’s jobs market is among reasons to fear that inflationary pressures could become entrenched in the economy. Nvidia crisis: analysts question if Huang can survive City analysts are weighing up the potential impact of the Nvidia scandal, and pondering whether it could cost Jensen Huang his job. Ipek Ozkardeskaya , senior analyst at Swissquote , points to the company’s crucial role at the heart of the AI boom: double quotation mark One reason Nvidia fell so much is that it has positioned itself as the mascot, the face of the AI trade.
The company is at the epicentre of the AI boom, with the most powerful—and premium—product range, financial deals, investment support and broader commitments involving many companies to keep orders coming. And CEO Huang has been a central figure at Nvidia: besides having a far-reaching vision of what AI will look like—and therefore staying a step ahead in terms of business decisions—he has also been involved in politics and helped shape decisions regarding the White House’s China policy within the broader technology war. The risk is: if he has to leave, who will replace the man in the black leather jacket, and what will the broader implications be for Nvidia’s sales, earnings and its ecosystem ?
His departure remains hypothetical, however, and Nvidia’s board has expressed confidence in his leadership while launching an independent investigation. Terri-Leigh Bennett, chief operating officer at CMS Prime, warned that the “leadership crisis” at Nvidia is threatening the most important company in artificial intelligence double quotation mark Nvidia’s approximately 4.27% decline toward $178–$179 [yesterday] was a striking rejection of the broader semiconductor recovery. While competing chipmakers advanced, Nvidia fell to its weakest levels in months as investors confronted allegations surrounding chief executive Jensen Huang and a potential foreign intelligence effort.
The board launched an independent investigation following reports involving a Chinese business executive alleged to have intelligence connections. Huang acknowledged a personal relationship and pledged cooperation; Nvidia maintained that no evidence indicated confidential information had been compromised. Volume reportedly approached 3.7 times normal.
The issue is not simply the allegations but the degree to which Nvidia’s valuation depends on confidence in one leader. AJ Bell head of financial analysis Danni Hewson says: double quotation mark “Jensen Huang is the heart of Nvidia. His hand has been firmly on the tiller as the small-time chipmaker morphed into the AI behemoth it is today.
“His vision is seen by many as a key factor in the company’s stellar growth and there are huge question marks about how it will navigate the coming days, especially if Huang is forced to consider his position. “Whilst Nvidia’s products and relationships with other big players should limit any gains competitors are able to make in the short term, this could present a huge opportunity if the uncertainty continues into the new year.” Chris Coons: must investigate if national security was compromised US senator Chris Coons is calling for a congressional investigation into Nvidia and CEO Jensen Huang . Posting on X, Coons – a Democrat – says: double quotation mark I’m pushing to investigate Jensen Huang and Nvidia to determine whether our national security was compromised.
We need answers about the relationship between AI billionaires and the Trump administration, who’s making these decisions, and who’s really got their hand on the wheel. Introduction: Nvidia hit by shareholder lawsuit Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. The fallout over Nvidia CEO Jensen Huang’s affair with an alleged Chinese spy is intensifying, after the AI chipmaking firm has been hit with a shareholder lawsuit.
According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang’s alleged affair with Alice Huang , a former executive of Singapore-based Megaspeed , and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects. The suit also claims that Huang’s failure to disclose the affair artificially inflated Nvidia’s share price, and could have violated federal securities laws, Politico reported. Nvidia’s share price took a knock yesterday – falling by 3.2% and cutting the company’s valuation by almost $200bn, to $4.3tn.
Huang’s reputation has taken a serious knock, after he admitted being unfaithful to his wife following reports of an affair with Nvidia customer and alleged Chinese spy Alice Huang . As Megaspeed has been accused of illicitly smuggling and diverting restricted Nvidia chips to China, the ramifications are serious. Donald Trump weighed in over the scandal yesterday, telling reporters: double quotation mark “I asked him [Mr Huang] about that and he said he had absolutely no idea that the person in question was a spy.” Trump also told a news conference that the US Federal Bureau of Investigation was involved in the case, saying: double quotation mark “We’ll look into it.
I know the FBI is looking into it in terms of something else.” The agenda 8am GMT: Worldpanel UK supermarket inflation data From 9am GMT: Bank of England Watchers’ Conference in London 11am GMT: NFIB index of US business optimism 1.30pm GMT: US inflation report for October
Source: The Guardian
