Nvidia hires Wachtell's Joon Kim, a former top federal prosecutor, to probe CEO Huang

Update to our Sunday report: Nvidia's independent directors have now said who will run the investigation into CEO Jensen Huang. In a statement quoted by CNBC, the board said it has retained "former acting U.S. Attorney of the Southern District of New York Joon H. Kim and his firm Wachtell, Lipton, Rosen & Katz to conduct a thorough and independent investigation."

What the hire tells you

On Sunday the board said only that independent directors, assisted by outside counsel, would look into reports that Huang was targeted by a foreign intelligence operation. Naming counsel answers the question we flagged then: who is actually doing the work. According to the New York Post, Kim served as acting U.S. attorney in Manhattan from March 2017 to January 2018 and was one of two lawyers New York's attorney general appointed in 2021 to investigate misconduct allegations against then-Gov. Andrew Cuomo.

CNBC reports the board's scope includes whether company secrets or national security were compromised. The board said on Sunday it has no reason to believe either was. Nvidia has not published a timeline or said whether the findings will be made public, and none of this is a finding about Huang or the company.

The market reaction

CNBC reports the stock dropped about 6% on Tuesday after falling more than 4% on Monday. Our chart data shows it roughly 29% below its October 6 peak. Nvidia reports third-quarter results on November 17, and a House briefing has been requested for November 18, as we reported earlier. See also our report on the FBI comment, the shareholder suit and succession and the Nvidia explainer.

What to watch

• Whether the board or Kim sets a reporting date, or says if conclusions will be disclosed.
• Whether Nvidia files an 8-K on the investigation or leadership. Check SEC EDGAR.
• What management says about the probe and China demand on the November 17 call.

Sources: CNBC and the New York Post, linked above; Bloomberg, the Wall Street Journal and MarketWatch carried the same hire on Tuesday; chart data via Yahoo Finance. We could not open the Bloomberg, WSJ or MarketWatch pages. This is market information, not investment advice.