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Nvidia’s board met late Wednesday to consider removing chief executive Jensen Huang according to people familiar with the matter cited by both the Wall Street Journal and Reuters. The discussions follow an independent investigation launched by the company into whether Huang was targeted by Chinese intelligence through a personal relationship. Shares in the artificial intelligence chip leader dropped more than 8 percent in after-hours trading as investors reacted to the potential leadership upheaval at the firm valued around 4 trillion dollars.
The controversy originated with reports that Huang had an affair with Alice Huang an executive at Singapore-based Megaspeed a major Nvidia customer. U.S. intelligence officials believe Alice Huang is a Chinese spy who facilitated the transfer of restricted Nvidia chips to Chinese entities according to the New York Times and other outlets. Megaspeed has faced scrutiny from the U.S. Commerce Department and Justice Department over alleged violations of export controls on advanced AI technology.
A subsequent New York Times report citing five Nvidia employees revealed that Huang also had an extramarital relationship with Kimberly Powell the company’s vice president of healthcare who reported directly to him. The pair were reportedly seen being affectionate at a hotel during a conference earlier this year. Neither Huang nor Powell has commented publicly on the allegation and Nvidia has not confirmed the report.
In a memo to employees on Sunday Huang acknowledged that he had been unfaithful to his wife and said he took full responsibility for his actions. The Nvidia board initially expressed confidence in Huang but shifted to hiring external legal counsel from Wachtell Lipton Rosen and Katz to oversee the probe. President Donald Trump stated that he spoke with Huang who claimed he had no idea the woman was allegedly a spy.
Congress has become involved with three Republican lawmakers requesting a closed-door briefing from Huang on November 18 and threatening a subpoena if he does not appear. The Justice Department is now leading an investigation into Alice Huang and potential national security breaches linked to Nvidia’s business dealings in China. Public reports indicate that at least 240,000 restricted chips may have been diverted through networks associated with Alice Huang.
A BBC video titled Watch: The latest in the Jensen Huang Nvidia scandal has highlighted the rapid sequence of events that have unfolded over the past week. The developments have erased hundreds of billions in Nvidia’s market capitalization with some estimates placing the two-day loss at 470 billion dollars according to market data. Analysts are now assessing the impact on the broader AI industry should the co-founder depart the company he built into a global powerhouse.
