Donald Trump, Elon Musk and prominent finance moguls have expressed their support for embattled Nvidia CEO Jensen Huang, as the head of the world's most valuable chip company faces an internal investigation over a romantic relationship with an alleged Chinese spy.

"I have not ​spoken to him about it," the US president told reporters on Sunday. "I just know he's a fine person, but you never know what is going on. I'm sure, I hope everything's fine. He's done such an incredible job".

"I think he's an honorable guy. I think he probably has an excuse for it," Trump later added, saying he believed that Huang would and should stay on as CEO.

Huang's defenders framed his affair as a personal lapse in judgment rather than evidence of treachery against the United States, which has imposed strict limits on what chips Nvidia can sell to China.

Huang, who has been married to his wife, Lori, since 1985, admitted in an email to employees on Sunday that he had an affair and that he would cooperate with an internal investigation. Nvidia's board of directors put out a statement the same day that the company was launching a probe regarding reports that Huang was the target of a foreign intelligence effort.

The chip mogul is alleged to have had a relationship with Alice Huang, a businesswoman that US intelligence services suspect of spying for the Chinese government, according to The New York Times. Trump was reportedly briefed on the relationship last year, the Times reported, but took no action. Alice Huang and Jensen Huang are unrelated, with the latter being one of the world's richest men and CEO of Nvidia, worth more than $4tn, for the past 33 years.

US intelligence agencies believe Alice Huang, acting on behalf of Beijing, pushed Jensen Huang to lobby Trump for relaxed export controls on Nvidia's sales in China, which he has done multiple times publicly. Nvidia said in a statement that neither trade secrets nor US national security had been compromised.

The affair and alleged intelligence operation involving Huang could have far reaching implications for Nvidia and the tech industry, which are already enduring a period of high market volatility. Huang's leadership of Nvidia, which is deeply financially intertwined with other leading tech companies like OpenAI, has long been viewed as crucial to the company's success and stability.

As news of the scandal broke over the weekend, Musk and prominent investors shared their support of Huang. Musk posted "I agree" in response to prominent venture capitalist Shaun Maguire's defense of Huang. Maguire argued the Nvidia CEO "did something incredibly dumb" but that he is "one of the greatest entrepreneurs of this generation".

"Two mistakes don't make a right, and I believe Jensen is irreplaceable for America's AI leadership," Maguire posted. He stated the Nvidia CEO "did something incredibly dumb" but that he is "one of the greatest entrepreneurs of this generation".

"Let's also not nuke our AI industry because China ran a successful intel op," Maguire added in a separate post.

Bill Ackman, the US hedge fund manager and pro-Trump billionaire, meanwhile, suggested that Huang is "human" and deserves public support over the affair.

"He is an incredible human. Even incredible humans make mistakes," Ackman posted. "He takes full responsibility as he should. We should all support him and his family. Onward."

Ackman followed up with another post later clarifying that he wasn't suggesting Huang "gets a free pass" but that he was "hoping for a simple affair, not a risk to our national security".

China has meanwhile denied allegations of an intelligence operation targeting Huang, with the Associated Press reporting that foreign ministry spokesperson Guo Jiakun rejected the allegations as "entirely baseless vilification and smearing".

Nvidia and its chips have been an integral part of the AI boom in recent years, with hundreds of billions of dollars committed to building out projects such as datacenters and chip factories. In August, Nvidia agreed to provide a $105bn guarantee to help OpenAI lease an Ohio datacenter.

As Nvidia has grown in prominence, Huang has also become one of the world's richest people and most influential figures in tech. He has taken calls from Trump in the middle of an all-hands company meeting and on stage at a conference, and attended state dinners with the president and accompanied him on a trip to China. Huang has also been a powerful voice on tech policy, weighing in on issues such as export controls of chips to China and regulation of open-source AI models.

Nvidia's stock price fell on Monday as speculation swirled around Huang's future at the company and the extent of damage from the affair. Shares were down around 5% as of midday and were on track to wipe out around $200bn in market value. The losses extend a six-month slide for what was once the world's most valuable company, with Nvidia shares down over 20% since May.