Nvidia board preparing to remove CEO Jensen Huang over affairs: Report
Jensen’s possible ouster may hit the company hard, as he was key to its development over decades, making it a dominant player in the chip-making industry and helping the US be a frontrunner in the AI race
The board of chip-making company Nvidia is reportedly in the process of removing its CEO, Jensen Huang, in the wake of revelations about his extramarital affairs, including one with a Chinese spy.
The Wall Street Journal, quoting sources familiar with the matter in a report on Wednesday (November 12) said the board was slated to meet that day to decide on Huang’s fate.
The company that is central to the artificial intelligence boom has been under pressure since its board announced an investigation into Jensen’s alleged affair with Chinese businesswoman Alice Huang alias Huang Le. President Donald Trump said the FBI is investigating the affair, which Huang has acknowledged and apologised for.
What Huang’s ouster means for Nvidia
Huang’s possible departure, however, may create a vacuum in the $4 trillion company that he co-founded and built over three decades as a major supplier of AI chips at a time when the technology is witnessing rapid development across the world.
Also read: Huang under probe: What next for Nvidia and its investors?
It was evident on Wednesday when the company’s shares fell around 8 per cent in after-hours trading. The company has lost around $600 billion in stock market value after the board announced its investigation to establish if Huang was spied upon by the Chinese.
“Huang being removed immediately could be challenging for Nvidia since it does not have a succession plan in place…If Mr Huang broke the law or violated company policies, the board is likely to act soon as they have proof,” Reuters quoted Gil Luria, head of technology research at DA Davidson, as saying.
Affair with subordinate
While the company was dealing with the controversy around Jensen’s affair allegedly with Alice, a New York Times report said that he also had an affair with Kimberly Powell, Nvidia’s vice president of health care who reported to him.
Powell, 48, joined the company in 2008 and handles its worldwide healthcare business, including hardware and software platforms for accelerated computing, AI, and visualisation.
Also read: Gaming chips to AI dominance: What Huang built, and what Nvidia now risks losing
The NYT report said that she attended technology conferences around the world, delivering speeches on behalf of Nvidia.
The article says in March she appeared at GTC, Nvidia’s annual developer conference in San Jose, where she and Huang were caught being affectionate. The act was captured on camera by a bystander, who was caught by Huang’s security team and made to sign a non-disclosure agreement, NYT quoted three people familiar with the matter as saying,
Jensen and Nvidia
Nvidia is the world’s biggest supplier of the high-end chips used for AI and data centres, with some estimates putting its market share over 80 per cent.
The now multi-trillion-dollar company got its start making chips called graphic processing units (GPUs), used largely for video games. However, these chips – and their successors – turned out to be ideal for the kind of number-crunching needed for training and using AI models.
Other companies such as Google and AMD have tried to make chips that can compete with Nvidia for speed and efficiency; however neither has been able to displace Nvidia from its dominance of the AI market.
Also read: Alice Huang used ties to Jensen Huang to divert $7.5 bn Nvidia chips to China: Report
As a consequence, Nvidia has played a key role in the US government’s strategy to stall China’s development of AI. Sales of Nvidia’s most powerful chips to China have been restricted since 2022 – though the restrictions were somewhat relaxed last year.
However, Chinese enterprises have repeatedly tested the boundaries of US sanctions. Southeast Asian companies including Megaspeed, Alice Huang’s former employer, have been accused of buying up Nvidia chips and exporting them into China.
Jensen Huang has lobbied intently for a relaxation of US chip export restrictions, which is being seen in a new light after the revelation of his relationship with Alice Huang.
Nvidia’s share price tumbled after the affair was revealed.
Cost of affairs
Now the company is reportedly under criminal investigation. At the same time, US technology regulators are mobilising, with Congress requesting Jensen Huang explain his interactions with Alice Huang, and how Nvidia protects itself against foreign espionage.
If Nvidia is forced to guarantee its chips don’t enter China, its sales pipeline may grind to a halt. And if Nvidia hits trouble, the financial impacts could be much wider.