I think they go spooked because he's been a proponent of relaxing export controls to China and it turns out it's because his mistress/gf is a chinese spy who is influencing him. And NVIDIA is making what currently is probably a product of national security importance.

If I was them, I'd be worried that the government invoke the Defense Production Act (DPA) or impose National Security Agreements and Clearances which would require NVIDIA to isolate sensitive R/D, restrict foreign nationals from accessing specific chip designs, and place government-vetted compliance monitors on its board or security teams. ALSO there definately will be subpeonos and probes and those are never fun.

Easier to say we cut out the guy responsible and hopefully that lessons the troubles