Nvidia’s stock was down 8% after hours on Wednesday after new reports dropped concerning CEO Jensen Huang.
The Wall Street Journal reported the Nvidia board was preparing to remove Huang. Days earlier, the board said it was investigating whether Huang was the target of a foreign intelligence effort after the CEO acknowledged having an extramarital affair.
The New York Times also reported new allegations on Wednesday, saying Huang had a second extramarital affair with an executive at Nvidia who reports to him, citing five unnamed sources who worked at the company. The Times said the executive was Kimberly Powell, Nvidia’s vice president of health care.
Nvidia declined to provide a statement to The New York Times.
Other stocks with direct ties to Nvidia also seemed to move in response to Wednesday’s news.
CoreWeave, a cloud computing company that uses Nvidia chips and counts Nvidia as an investor, saw its stock drop over 4% after hours. Micron, which supplies memory used alongside Nvidia’s chips, was down nearly 3% after hours while Supermicro, which builds servers, was down nearly 5%. TSMC, which manufactures the chips Nvidia designs, was down over 2%.
On Sunday, Huang admitted to having an affair in a memo to employees and said he was cooperating with the board’s investigation. He did not name his affair partner. The New York Times had previously reported that US intelligence officials believed Alice Huang, a tech executive who had grown close to the CEO, was recruited to gather information for Beijing.
Days before disclosing his affair, Huang told Bloomberg his interactions with Alice Huang were related to their business dealings and “all completely normal and not unusual.”
Obtained by Reuters/via REUTERS
Alice Huang, a Chinese national who is not related to the Nvidia CEO, has worked as an executive at Megaspeed, a cloud computing company in Singapore that was also an Nvidia customer.
Nvidia’s board hired Wachtell, Lipton, Rosen & Katz, an elite Wall Street law firm, to carry out the investigation, with partner Joon H. Kim, a former US attorney, tapped to lead it.
Lawmakers last week also sent a letter to Huang requesting he testify about his relationship with Alice Huang, citing “significant national security concerns.”
Nvidia succession plans
Nvidia’s CEO has become nearly synonymous with the company he cofounded, but the question of succession at one of the world’s most valuable companies has gotten major attention this week.
Nvidia has not publicly shared a succession plan. On Sunday, the board told Business Insider that “Jensen is committed to continuing to lead Nvidia as CEO without interruption.”
Analysts and former employees said there were several potential successors, including vice president Ian Buck and chief financial officer Colette Kress.
Huang’s two adult children, Madison and Spencer, also work at Nvidia.
This is a developing story.
