Hundreds of billions of dollars have been wiped off the value of Nvidia after the US chipmaker announced an independent investigation would be carried out into its chief executive’s affair with an alleged Chinese spy.

The tech firm saw its shares fall by about 6% on Monday after Jensen Huang admitted having an extramarital affair.

Nvidia’s probe came after reports that the US believed the Nvidia boss had been targeted in an espionage campaign by China.

However, China has rejected the claims, with its foreign ministry saying “allegations about Chinese spies were “entirely groundless, speculative and intended to smear and malign China”.

Nvidia said it had no reason to believe the company’s secrets or national security were compromised, but a statement by the firm’s board of directors said it would begin an investigation in “light of recent reporting that founder and chief executive Jensen Huang has been the target of a foreign intelligence effort”.

US intelligence officials believe Alice Huang, also known as Huang Le, was a spy for Beijing, according to a New York Times report, external.

The report said Secretary of State Marco Rubio sent a memo to top officials in Washington last spring warning that the Nvidia boss was in a close relationship with a Chinese spy.

Alice Huang was managing director of Singaporean company Megaspeed, which has had dealings with Nvidia.

Huang admitted he was “unfaithful” to his wife and apologised for hurting her and their children. He added he was “committed to protecting Nvidia and supporting America’s national security” and would cooperate with the investigation.

After the investigation was announced, other big tech bosses, including Elon Musk, came out in support of Huang to continue leading the firm.

US President Donald Trump said the Nvidia boss was an “honourable guy”.

However, the news sparked a sell-off in Nvidia’s shares, with about $250bn (£190bn) wiped of the company’s market value.