Nvidia's shares are likely to remain under pressure as the spy controversy continues to grip the company, warns chief investment strategist at

Jensen Huang's superstar position at the centre of the AI world, courted by world leaders and lauded as a visionary, has been dealt a severe blow given the risks he has courted.

But with no clear succession plan in place, the board for now appears to be standing by their man, given how intrinsically his personality seems woven into Nvidia's valuation. It will depend on what further revelations come out of investigations and, as they progress, the share price is set to stay under pressure.

Wachtell, Lipton, Rosen & Katz also has a pretty distinguished backstory.

Founder Martin Lipton invented the "in the 1980s to help companies ward off hostile takeovers.

Technically called the "shareholder rights plan", the poison pill allowed investors to buy more shares at a discount if one shareholder acquired a certain percentage of the company's stock. This made it harder for corporate raiders to aquire a company without the board's approval.

The firm was closely involved in the takeover of by – the largest corporate takeover in history at the time (although it turned sour when thwarted suiter Pennzoil sued Texaco, and won).

And in 2008,a team of Wachtell lawyers advisedthe US Treasury Department on the takeover of and during the financial crisis.

Headquartered in Manhattan, the firm was founded in the 1960s and is said to be the most profitable law firm in the US. It pulled in revenues of $5.085m per lawyer last year, and made profits of $12m per partner – the highest profits per partner ever, according to the Am Law 100 rankings.

Joon H. Kim, who will lead the investigation into whether Jensen Huang has been the target of a foreign intelligence effort, has an impressive career history – both in private practice and in government.

From 2017 to 2018, he was Acting US Attorney for the Southern District of New York, where he ran a team of lawyers investigating securities and commodities fraud, mail and wire fraud, public and private corruption, money laundering, cybercrime, and tax offenses.

That included the case of former US representative who was sentenced to 21 months in prison for sending obscene material to a minor.

He also oversaw the prosecution of banker , who was convicted in 2017 of helping to evade US sanctions on Iran.

Another high profile assignment landed on Kim's desk in 2021, when he investigated multiple allegations of sexual harassment by New York Governor .

It's only a month since he joined Wachtell, Lipton, Rosen & Katz, the legal firm hired by Nvidia, from rival New York law firm Cleary Gottlieb Steen & Hamilton. There, he had specialised in white-collar criminal defense, internal investigations, regulatory enforcement, and commercial litigation.

In that role, led an investigation into the workplace culture at the , following allegations of harassment and discrimination at the agency.

The drop in Nvidia's share price this week may embolden the shareholders who are suing the company.

A lawsuit was filed in California this week, alleging that Nvidia and chief executive Jensen Huang mislead shareholders by not disclosing that the matter raised national security concerns.

Nvidia's 5.47% decline to $168.89, extending its losses for a second consecutive session, has transformed an executive controversy into a test of institutional confidence. Approximately $430 billion in market value has reportedly disappeared across the two sessions as investors confront allegations involving CEO Jensen Huang's personal relationship with a businesswoman suspected of connections to Chinese intelligence.

Independent directors have retained Wachtell Lipton, including former prosecutor Joon Kim, to investigate whether the relationship involved foreign intelligence activity or compromised company information. The allegations remain under investigation, and Nvidia says it has no reason to believe secrets or national security were compromised.

Nevertheless, Nvidia's extraordinary valuation depends partly on confidence in Huang's leadership, making executive continuity and China-related export exposure unusually consequential.

The allegations over Nvidia are testing relations between Washington DC and Beijing, according to the top US diplomat in China.

Ambassador told Bloomberg Television:

"The situation with Nvidia is another reminder that we have to stay diligent.

"National security is part of this economic conversation because economic security is national security. And so, what we're doing with China is bumpy right now."

Good morning, and welcome to our rolling coverage of business, the financial markets, and the world economy.

The crisis gripping Nvidia is gathering pace, with around $430bn wiped off the value of the world's most valuable company since it was hit by a spying scandal.

Overnight, Nvidia announced it has hired a former top federal prosecutor to help probe chief executive Jensen Huang's relationship with a suspected Chinese spy.

The company's board have retained Joon H. Kim, the former acting U.S. Attorney of the Southern District of New York, and his firm Wachtell, Lipton, Rosen & Katz to conduct "a thorough and independent investigation".

is a heavyweight corporate law firm. In 2022 it was hired by Twitter to force Elon Musk to complete his $44bn takeover, for example, and has a track record of advising major companies on issues such as mergers and corporate governance.

It will now look into the circumstances of affair – thought to be with , who US officials believe is a Chinese spy, and who worked for customer Megaspeed.

Although Beijing has denied allegations that it operated an espionage operation targeting , value has been buffeted this week.

Yesterday, its shares fell by almost 5.5%, adding to the 4.27% drop on Monday. This has pulled the company's value down to $4.07tn, from $4.50tn before the story broke last weekend.

The agenda

• 9.45am BST: ECB President Lagarde taking part on panel discussion at 9th Paris Peace Forum in Paris

• Noon BST: US weekly mortgage approvals data

• 2.15pm GMT: Chancellor John Healey quizzed by Treasury committee on the budget