Nvidia’s board of directors met on Wednesday to decide whether to remove chief executive and co-founder Jensen Huang, as reports of two extramarital relationships put pressure on the world’s most closely watched AI company.
Nvidia shares fell more than 8% in after-hours trading after The Wall Street Journal reported that the board was preparing to remove Huang, a report Reuters independently confirmed. At the time of writing, Nvidia had made no official announcement of a decision.
How the story developed
On Sunday, Huang told employees in an internal message that he had been “unfaithful” to his wife, and apologised to her and their family. The same day, Nvidia said its board had opened an independent investigation, following reports that Huang had been the target of a foreign intelligence effort. The board hired the law firm Wachtell, Lipton, Rosen & Katz to lead the review.
ALSO: Dangote Refinery IPO Draws ₦5.85tn in Applications, Nearly Triple Its Target
The woman involved is Alice Huang, who is no relation and was an executive at Megaspeed, a Singapore-based company that is one of Nvidia’s major customers. U.S. intelligence agencies are reported to believe she was a Chinese asset. The Chinese government has denied the allegations, calling them baseless smears. Nvidia has said its CEO’s dealings with her were part of his job. The board also said it had no reason to believe the company’s secrets or national security had been compromised.
The latest turn came when The New York Times reported a second relationship, with a senior Nvidia executive. Nvidia and the executive had not responded to requests for comment from CNBC, and Fintech Insights has not independently verified the report.
What happens next
Some board members reportedly favour naming Chief Financial Officer Colette Kress as interim CEO if Huang is removed. The company has also reportedly hired an outside search firm to find a permanent successor.
The board’s power over Huang is considerable. He owns about 3.6% of Nvidia and has no super-voting shares, so a simple majority of directors can remove him. Separately, Republicans on the House Select Committee on China have asked him to appear for a closed-door briefing on November 18 about his relationship with Alice Huang.
Market impact
CNBC reported that Nvidia shares were already down about 7% this week before the after-hours drop, and were on course for a sixth straight weekly decline, reflecting wider concern about how sustainable the AI infrastructure build-out is.
Nvidia is one of the biggest beneficiaries of the AI boom, because its chips are used to train models and run large AI workloads, and Huang has become closely identified with the industry.
