A hot potato: On Sunday, Nvidia's board said it still had confidence in Jensen Huang. That confidence lasted all of three days. The board is now reportedly preparing to push him out, with directors set to meet as soon as Wednesday to decide the future of the man who co-founded the chipmaker in 1993 and remains the only CEO it has ever had. The turn came after a second extramarital affair surfaced, this time with an Nvidia executive who reports directly to him.
The Wall Street Journal reported the board's plans on Wednesday, citing people familiar with the matter. A separate source told Reuters that directors were meeting that same evening. Nvidia shares dropped about 8% in after-hours trading.
The board first opened an investigation on Sunday, the same day Huang told his entire staff in writing that he had been unfaithful to his wife. The woman involved is Alice Huang – no relation – who was an executive at Singapore-based Megaspeed, one of Nvidia's major customers.
The catch: US intelligence officials believe she is a Chinese intelligence asset. Beijing has brushed off the claims, Megaspeed denies wrongdoing, and Nvidia has described its dealings with her as routine.
At the time, the board said it had no reason to believe national security or company secrets had been compromised. But on Wednesday, The New York Times reported a second relationship, with Kimberly Powell, Nvidia's vice president of healthcare. The paper cited five people who worked at the company. Two of them even said the pair were filmed being affectionate at a San Jose hotel during Nvidia's own developer conference in March.
Unlike the first affair, this one involves someone on Huang's own team. Nvidia's code of conduct tells employees to avoid conflicts, including those created by personal relationships.
Whoever replaces Huang would inherit an unusually flat company. He has roughly 60 people reporting directly to him – most big-company CEOs have a handful – and no obvious second-in-command. Weirdly, he's also said he doesn't believe in succession planning at all. He'd rather leaders just keep passing on what they know as they go.
Bloomberg reports the board is already working with an outside firm to identify candidates and is weighing a temporary chief. Semafor, meanwhile, says some directors favor CFO Colette Kress for the interim role. Interestingly, Apple hardware chief Johny Srouji is reportedly in the running for the top job, too.
Surprisingly, for a founder this powerful, Huang has no super-voting shares to fall back on. He is Nvidia's largest individual shareholder, yet he owns only about 3.6% of the company. Vanguard holds roughly 9% and BlackRock roughly 7%. A simple majority of the board can remove him as CEO, with or without cause.
Nvidia board reportedly preparing to oust Jensen Huang after second affair report
