Nvidia board considers removing CEO Jensen Huang as shares fall 6.5%

Nvidia’s board is reportedly weighing whether to remove co-founder and Chief Executive Officer Jensen Huang, days after opening an independent investigation into reports that he was the target of a foreign intelligence effort.

According to reports, Nvidia directors were meeting late Wednesday to discuss Huang’s future, although the company has yet to announce a decision on his position.

The development coincided with a 6.53% decline in Nvidia’s shares to $162.38 in overnight trading, according to figures cited by Yahoo Finance.

The stock had closed Wednesday’s regular US trading session at $173.73, up 2.92%, before reports of the board deliberations reversed those gains.

Nvidia Board Reviews Huang’s Future

The Wall Street Journal first reported that Nvidia was preparing to remove Huang as chief executive, following the launch of an independent investigation into allegations involving his personal relationships.

Reuters subsequently reported, citing a person familiar with the matter, that directors were meeting late Wednesday to decide his future.

• Nvidia has not announced a decision to remove Huang or appoint a replacement.
• The reported board discussions follow an investigation announced on Sunday into potential national security and corporate information risks.
• Nvidia’s shares fell 6.53% to $162.38 in overnight trading after closing Wednesday’s regular US session at $173.73.
• The stock had gained 2.92% during regular trading before the reports of board deliberations emerged.

The reported discussions represent a potential shift from the board’s earlier expression of confidence in Huang and his leadership team.

When Nvidia announced the investigation, it said Huang had committed to cooperating with the independent committee overseeing the inquiry.

The board also stated that it had no reason at the time to believe US national security or the company’s confidential information had been compromised.

Huang remains Nvidia’s chief executive pending any official announcement about his position.

Nvidia Examines Alleged Intelligence Links

Nvidia announced on Sunday that a committee of independent directors, assisted by external legal counsel, would oversee an investigation into allegations involving Huang.

The inquiry followed reports concerning his relationship with Alice Huang, a former executive at technology company Megaspeed, whom US intelligence officials reportedly suspected of acting as an intelligence asset for Beijing.

• The New York Times previously reported that US intelligence officials suspected Alice Huang may have had links to Chinese intelligence.
• Jensen Huang acknowledged an extramarital affair in a message to employees on Sunday and apologised to staff and his family without identifying the person involved.
• The Times separately reported allegations concerning a relationship between Huang and Kimberly Powell, Nvidia’s vice-president of healthcare, who joined the company in 2008.

Citing people who worked at Nvidia, the newspaper reported that Huang and Powell were seen being affectionate at a hotel during a company conference in March.

What you should know

Nvidia’s board opened an independent investigation into Jensen Huang following reports that he had a relationship with a woman US intelligence officials suspected of spying for China. A committee of independent directors, assisted by outside counsel, is overseeing the inquiry. Huang acknowledged an extramarital affair in a message to employees and apologised to staff and his family without identifying the person involved.

• When it announced the probe, the board expressed confidence in Huang and his leadership team. It also said it had no reason at the time to believe US national security or Nvidia’s confidential information had been compromised.
• The reported deliberations over his future put the company’s succession plans in focus. Huang co-founded Nvidia in 1993 and has served as chief executive since its inception, overseeing its expansion from a graphics chipmaker into a leading supplier of processors for artificial intelligence.

The scrutiny has also coincided with swings in Huang’s personal fortune. His estimated net worth fell by $7.8 billion in 24 hours to $154.4 billion, according to Forbes’ Real-Time Billionaires ranking on November 9. The 4.81% decline placed him 10th on the global list at the time. Much of his wealth is tied to his Nvidia stake, making it sensitive to changes in the company’s share price.