Nvidia Board Preparing to Oust CEO Jensen Huang, WSJ Reports
Nvidia shares fell over 7% after hours on a WSJ report that the board may remove Jensen Huang following a second alleged affair.
Nvidia’s board of directors is preparing to remove Jensen Huang, the co-founder and chief executive of the world’s most valuable chipmaker, The Wall Street Journal reported on Wednesday. The report came minutes after The New York Times said Huang had a second extramarital relationship, this time with a senior Nvidia executive, and only days after he admitted to an affair with a woman whom U.S. intelligence officials reportedly believe is a Chinese spy. Nvidia shares fell more than 7% in after-hours trading, according to CNBC.
What happened
According to the Journal’s reporting, as summarized by CNBC and the San Francisco Standard, the board is likely to move against Huang, possibly as soon as Wednesday night. Nvidia did not immediately respond to CNBC’s request for comment, and as of the latest reports the company had not confirmed or denied that a decision had been made.
The New York Times reported that Huang had a relationship with Kimberly Powell, Nvidia’s vice president of health care, who reports to him. The Times said the two were seen being affectionate in video recorded at a hotel in San Jose, California, during an Nvidia conference in March. A former employee told the paper that rumors about the relationship had circulated for years. Powell joined Nvidia in 2008 and has led its health care group since 2017, according to CNBC and the San Francisco Standard. Health care is a small part of Nvidia’s business compared with its AI systems and graphics processors.
When Times reporters reached Huang by phone on Wednesday and asked about Powell, he told them, “I don’t think you should be talking to me directly,” and hung up, the San Francisco Standard reported. Neither Huang nor Powell has publicly addressed the Times report beyond that exchange.
The earlier scandal
The latest reports deepen a crisis that began last weekend. On Sunday, Huang admitted in a message to staff that he had an affair with a woman who, according to the New York Times, U.S. intelligence officials believe works for China’s Ministry of State Security, the country’s main civilian spy agency. “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did,” Huang wrote, according to CNBC. The woman has not been charged with any crime, and the intelligence assessment has not been made public.
On Nov. 8, Nvidia’s board said in a statement that it was opening an independent investigation, overseen by a committee of independent directors with outside legal advice, into reports that Huang had been the target of a foreign intelligence effort. The board said it had no reason to believe that national security or Nvidia’s secrets had been compromised, that Huang supported the review and had committed to cooperate, and that it had confidence in him and his leadership team. The company hired the law firm Wachtell, Lipton, Rosen & Katz to examine the spying allegations, CNBC reported.
Before Wednesday’s reports, many Silicon Valley figures had publicly backed Huang. Venture capitalist Ron Conway urged patience while the investigations ran their course just minutes before the Times story was published, the San Francisco Standard reported.
Pressure from Washington
The affair has also become a political issue because of Huang’s long opposition to strict U.S. limits on exports of advanced AI chips to China, a stance that has angered China hawks in Congress. CNBC reported that several lawmakers from both parties had already called for him to step down:
- Sen. Kevin Cramer, a North Dakota Republican on the Senate Banking Committee, said Huang “should resign” and warned he could be vulnerable to blackmail.
- Rep. Suhas Subramanyam, a Virginia Democrat and the top Democrat on a House Oversight subcommittee on military and foreign affairs, said Huang should step down.
- Rep. Don Bacon, a retiring Nebraska Republican, cited the risk that Huang had been compromised by the Chinese government.
In a Nov. 4 letter, Republican Reps. Brian Mast, chair of the House Foreign Affairs Committee, John Moolenaar, chair of the House select committee on China, and Rick Crawford of the House intelligence committee asked Huang to testify by Nov. 18. Mast said the committees would consider subpoenas if needed. Lawmakers are also pushing to add chip-security bills, including the AI Overwatch Act, the MATCH Act and the Chip Security Act, to the National Defense Authorization Act, the annual defense policy bill that Congress has not yet passed.
Why it matters
Huang has led Nvidia since its founding and has become one of the most recognizable figures in the AI boom, as Nvidia’s processors power much of the world’s AI infrastructure. His possible exit would mark one of the most dramatic leadership changes in recent corporate history. CNBC reported that Huang and his wife, Lori Huang, co-own most of his stake, about 800 million shares held largely in trusts, while he personally holds about 70 million shares.
The turmoil also comes at a difficult moment for the stock. CNBC said Nvidia shares were down about 7% for the week and on pace for a sixth straight weekly decline, as investors question how long the AI infrastructure buildout can last and weigh the results of last week’s midterm elections, in which Democrats won both chambers of Congress and voters approved measures that could make data center construction harder. It remains unclear who could succeed Huang; none of the reports named a likely successor.
