Nvidia shares plunged more than 8% in after-hours trading Wednesday following reports that the AI chip giant’s board was preparing to oust billionaire CEO Jensen Huang, amid growing scrutiny over his alleged extramarital affairs with two women—including one suspected by U.S. intelligence officials of spying for China and another who is a senior Nvidia executive.
Key Facts
Nvidia shares fell 8.61% in after-hours trading late Wednesday to $158.78, reversing gains made during the regular trading session when the stock closed 2.92% higher at $173.73.
The sharp selloff followed a Wall Street Journal report that Nvidia’s board was preparing to remove Huang as CEO.
Reuters independently confirmed the Journal’s report, adding that the board met late Wednesday to determine Huang’s future.
Earlier Wednesday, the New York Times reported that Huang had an extramarital relationship with Kimberly Powell, Nvidia’s vice president of healthcare who reports directly to him.
The purported move to oust Huang is a sharp reversal from Sunday, when Nvidia’s board announced an independent probe into whether Huang had been targeted by a foreign intelligence operation but publicly expressed confidence in his leadership.
At the time, the board noted that it had no reason to believe company secrets or national security had been compromised.
What To Watch For?
A key challenge facing Nvidia is the fact that the company has no obvious successor to Huang, who co-founded the company in 1993 and has served as CEO since then. Bloomberg reported Wednesday that the company’s board has been working with an outside firm to identify potential replacements for Huang. The board is also considering appointing an interim CEO if Huang is ousted, while it searches for a permanent replacement.
What Has Elon Musk Said About Huang’s Possible Ouster?
SpaceX and Tesla CEO Elon Musk indicated on Wednesday that he would be open to hiring Huang if Nvidia removes him as CEO. Responding to an X post which urged: “Elon please hire Jensen,” Musk wrote: “That would be an honor.” Musk’s companies are major customers of Nvidia’s AI chips, and both billionaires have repeatedly praised each other and their companies publicly in recent years.
key background
In an employee memo on Sunday, Huang acknowledged that he had an extramarital affair after reports emerged about his close relationship with Alice Huang, an executive at computing and data center operator Megaspeed International. U.S. intelligence suspects Alice Huang was working as an operative for Beijing. Nvidia’s board responded to its CEO’s admission by hiring outside counsel to lead an independent investigation into whether corporate secrets or national security were compromised. The company, however, maintained that it has found no evidence of compromised intellectual property.
Could Congress Subpoena Jensen Huang?
Congressional lawmakers have threatened to subpoena Huang if he fails to comply with their request to testify before Congress about his relationship with Alice Huang. House China Committee Chairman John Moolenaar said Wednesday that the Nvidia CEO had until 5 p.m. ET to agree to a closed-door briefing. Last week, Moolenaar, House Foreign Affairs Committee Chairman Brian Mast, and House Intelligence Committee Chairman Rick Crawford wrote a letter requesting that Huang appear for a joint closed-door briefing on November 18 to discuss his interactions with Alice Huang and “NVIDIA’s security protocols against foreign adversary espionage.” The letter said recent reports raised “significant national security concerns regarding the PRC’s access to sensitive U.S. technology and information,” and added it was “vital that Congress determines the extent to which U.S. national security has been placed at risk.” The subpoena threat follows other calls from lawmakers for a federal probe and Huang’s resignation. Sen. Kevin Cramer, R-N.D., urged Huang to resign, warning of the risk of extortion, while Sen. Chris Coons, D-Del., warned there is a strong chance American national security was compromised as a result of Huang’s affair.
forbes valuation
According to our estimates, Huang’s current net worth is around $151.2 billion, making him the 11th richest person in the world. This is likely to fall futher if the afterhours sell off in Nvidia’s stock price holds when markets open on Thursday. The Nvidia CEO fell out of the Forbes’ list of the top 10 richest in the world earlier this week after his acknowledged having an affair and the company’s board opened an independent probe into the matter.
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