Nvidia Preparing to Oust Jensen Huang, Board Meets Thursday
Nvidia's board is preparing to remove CEO Jensen Huang after reports of a second affair, according to people familiar with the matter. Shares fell about 7% after hours, and the board was due to meet on Thursday, November 12 (Australian time).
Nvidia's board is preparing to oust chief executive Jensen Huang after reports of two extramarital affairs, according to people familiar with the matter, with a meeting on his future set for Thursday, November 12 (Australian time).
The $4.1 trillion chipmaker is central to the global race in artificial intelligence. Its shares fell about 7% in after-hours trading on the news.
What the board is weighing
Nvidia has been working with an outside firm to identify possible replacements for Huang, according to reports. The board is also considering naming a temporary chief while it searches for a permanent one.
Huang, 63, founded the company in 1993. Nvidia has not responded to requests for comment on the latest reports.
If the share drop holds when New York opens, it would wipe about $300 billion off Nvidia's value and about $10 billion off Huang's paper net worth. Since the board opened its investigation, the company has lost roughly $600 billion in market value.
Second affair alleged
The latest allegation is that Huang had a second affair, this time with a subordinate who works as a vice president at Nvidia. The company's code of conduct tells staff to avoid situations that could create conflicts, including personal relationships.
It follows Huang's admission days earlier that he was unfaithful to his wife of more than 40 years. "My actions hurt her and our children," he said in a note to staff. "There is no excuse for what I did. I am deeply sorry."
The China question
The first affair involved Alice Huang, who is not related to him. US intelligence agencies concluded she had targeted him, according to reports. She ran Megaspeed, a Singapore-based company that could buy billions of dollars of Nvidia products despite US limits on selling advanced chips to China.
Nvidia's board said on November 8 it had "no reason to believe that either national security or Nvidia secrets were compromised". It added that its inquiry would examine all available information.
Chinese Foreign Ministry spokesman Guo Jiakun rejected the spy claim on Monday. He called it "purely a groundless accusation, slander, and a smear".
Succession risk
Gil Luria, head of technology research at D.A. Davidson, said a sudden exit could hurt. "Huang being removed immediately could be challenging for Nvidia since it does not have a succession plan in place," he said. He added that the board is likely to act as soon as it has proof if Huang broke the law or company policies.
Huang has pledged to cooperate with a law firm the board hired to examine his dealings. "I love our country and our company," he said. The board, which includes 10 directors besides Huang, has not announced a decision.
