Nvidia Board Prepares to Oust CEO Jensen Huang Over Two Affairs
Nvidia directors are meeting to decide CEO Jensen Huang's future after a second affair with a direct subordinate surfaced, compounding an earlier scandal involving alleged Chinese intelligence ties.
Board convenes as second affair surfaces
The Wall Street Journal reported Wednesday that Nvidia directors are preparing to meet to determine Huang's future after The New York Times disclosed an extramarital relationship between Huang and Kimberly Powell, the company's vice president of health care and one of roughly 60 executives who report directly to him. The Times cited five people who worked at the company and said it viewed video of Huang and Powell being affectionate at a San Jose hotel during Nvidia's annual developer conference in March.
According to the Times, a bystander filmed the exchange on a mobile phone. Members of Huang's security detail reportedly sequestered the individual and offered a non-disclosure agreement. When reached by telephone Wednesday, Huang responded: "I don't think you should be talking to me directly," before disconnecting the call.
Powell's role and reporting line
Powell joined Nvidia in 2008 as a business development employee focused on higher education and healthcare. She was promoted to senior director of AI business development in 2016 and appointed vice president of health care in 2017. Her LinkedIn profile describes her role as driving worldwide evangelism and go-to-market strategy for Nvidia's visual computing platforms in higher education and healthcare industries. She regularly represents the company on global stages.
Nvidia's corporate code of conduct instructs employees to avoid conflicts of interest, including personal relationships with direct subordinates.
First affair involved alleged Chinese intelligence operative
The latest revelation compounds an existing crisis. Days earlier, Huang acknowledged in a letter to employees that he had been unfaithful to his wife following reports linking him to Alice Huang, an executive at Singapore-based Megaspeed whom U.S. Intelligence officials suspect of spying for China. Megaspeed has faced investigation over suspicions it helped route advanced Nvidia chips to China despite U.S. Export restrictions. Huang and Alice Huang were photographed together at an event in Taipei in 2024.
In his Sunday memo, Huang wrote: "My actions hurt [my wife] and our children. There is no excuse for what I did. I am deeply sorry." The board announced an investigation the same day, saying independent directors and outside lawyers would examine reports that Huang had been targeted by a foreign intelligence operation. At the time, directors expressed confidence in Huang and said they had no reason to believe national security or Nvidia's secrets had been compromised.
On Tuesday, the independent directors retained former acting U.S. Attorney Joon H. Kim and the law firm Wachtell, Lipton, Rosen & Katz to conduct the investigation.
Market reaction and leadership vacuum concerns
| Detail | Information |
|---|---|
| After-hours share price | $160.95 |
| After-hours decline | 7.4% |
| Decline since November 6 close | 13.8% |
| Market value lost since Alice Huang news broke | More than $300 billion |
| Revenue for quarter ended July 26 | $96.2 billion |
| Data center revenue | $89 billion |
Nvidia shares fell about 8% in after-hours trading Wednesday. The stock has lost more than $300 billion in market value since news of the affair with Alice Huang broke. The company reported $96.2 billion in revenue for the quarter ended July 26, more than double its revenue a year earlier, with its data center business accounting for $89 billion of that total.
Huang co-founded Nvidia in 1993 and has run it since, making him harder to replace than hired managers. The company does not have a named successor or a succession plan in place. Gil Luria of D.A. Davidson told Reuters that Huang's immediate removal "could be challenging for Nvidia since it does not have a succession plan in place." Baird analysts Tristan Gerra and Tyler Bomba wrote earlier Wednesday that a CEO change was growing more likely and that an outside hire would be favored. Dan Ives of Yorkville Ives has said Nvidia would be worth 25% to 30% less without Huang.
Precedents and shareholder litigation
Two recent precedents illustrate the range of outcomes. Intel's Brian Krzanich resigned in June 2018 over a relationship with an employee; Intel had no successor ready, and its stock lagged the S&P 500 by 17 percentage points over the following year. McDonald's fired Steve Easterbrook in November 2019 for a similar violation but named Chris Kempczinski as CEO the same day; McDonald's shares outperformed the S&P 500 by nearly three percentage points over the subsequent year.
Investor Mark Kistenmacher sued Nvidia and Huang in federal court Monday, alleging that misleading statements about Huang's relationship with Alice Huang and Nvidia's dealings with Megaspeed inflated the company's share price before subsequent revelations caused investor losses. He is seeking class action status.
Board's next move
An Nvidia spokesperson told CRN on Wednesday: "Jensen is committed to continuing to lead Nvidia as CEO without interruption." A Blind survey of 232 Nvidia employees found 88% want Huang to stay. The board's decision — whether to name a successor quickly or leave the job open — will likely determine the stock's trajectory in the months ahead, just as the presence or absence of a ready successor separated the Intel and McDonald's outcomes.
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