Nvidia stock dropped and the company opened an investigation after reports surfaced that CEO Jensen Huang had a long relationship with a woman tied to Chinese intelligence, a story that's bad for Nvidia, rattling for U.S.-China tech policy, and personally damaging for Huang.

• Reports say the woman, a former executive at an Nvidia customer company, was recruited by China's top spy agency, and Huang confirmed having had an affair with her.
• The company linked to her is accused of acting as a shell operation funneling advanced Nvidia chips to China, raising fears that sensitive U.S. chip technology may have reached the Chinese military.
• Nvidia shares fell sharply on the news and hedge funds reportedly dumped tech stocks at one of their fastest paces on record.
• U.S. officials, including the Secretary of State, reportedly knew about the intelligence before Huang traveled with Trump to China, raising questions about whether the government ignored warning signs.
• In Taiwan, where Huang is seen as a hometown hero, the reaction has focused less on the affair and more on the fact that it involved someone tied to China, seen there as a rival state.

Outlook: Expect continued pressure on Nvidia's stock and growing political scrutiny over chip export policy as more details about the relationship and possible security risks come out.