Which suggests the formal assessment is it wasn't - they were investigating Megaspeed for sanction busting via chip smuggling, happened to notice the affair, and found nothing concrete.
Note sanction busting by buying lots of Nvidia chips and renting them to Chinese companies is perfectly legal ( and very lucrative ).
So that's the evidence about the security situation.
The real question is why leak the memo to the press now - and I don't pretend here to know the answer.
Has it crippled their AI charge? No. Hindered perhaps - but things like the rental loophole show how stupid it was.
What is has done is supercharge the internal chinese chip market ( which has endangered NVidia's global dominance ).
For example:
Where is the evidence that nobody in the security services did not know ? There is already history where Security services are not independent, and stuff that will be investigated depends on the current gouverement, what the timing of the leak seems to suggest.
Wake me up when that changes to actual spy.
Also turns out this wasn't the only affair the CEO had and it's not suggested the other woman was a spy.
The only reason not warn him would be:
1. There isn't a reason to.
2. You suspect him as well and want to monitor further.
There is no evidence of the latter ( either him being a knowing collaborator or him being directly monitored ).
The question you have to be asking is why was the memo leaked now and what political game are they playing.
In terms of ousting him - I know nothing about him as a person - but he has lead Nvidia for 30 years during which time it has wildy succeed in not an easy market - whatever this is about, it's not about competence.