Nvidia Board Prepares to Remove CEO Jensen Huang Following Reports

UPDATE - follow-up to Nvidia prepares to oust Jensen Huang, WSJ reports — stock sinks further: Nvidia shares dropped more than 7% in after-hours trading on Wednesday. The drop came after reports that the company board is getting ready to remove CEO Jensen Huang.

The Relationship Reports

Minutes before the board news broke, reports stated that Huang had an extramarital relationship with Kimberly Powell. Powell is the vice president of health care at Nvidia. According to reports, Huang and Powell were seen being affectionate at a hotel in San Jose, California, in March. Nvidia did not immediately respond to a request for comment. Heller, a crisis PR firm Huang reportedly hired last year, also did not respond.

Spy Allegations And Board Action

This report follows days after Huang admitted to a separate affair with a woman whom U.S. intelligence officials believe is a Chinese spy named Alice Huang. U.S. intelligence believes she works for China's Ministry of State Security. In response, Nvidia's board of directors started an independent investigation. The board hired the law firm Wachtell, Lipton, Rosen & Katz to look into the spying claims. On Sunday, Huang sent a message to Nvidia staff saying he was unfaithful to his wife and deeply sorry.

Business Context

Rumors about Huang and Powell have circulated for years because Powell lacks a background in health or science, according to an anonymous former employee. Healthcare is a smaller part of Nvidia. The company makes chips for medical devices and MRI machines, but these are minor compared to its advanced AI systems and graphics processing units. Nvidia stock is down 7% this week and faces its sixth straight weekly slide. Huang has become closely tied to the artificial intelligence industry, and Nvidia has grown hugely due to the AI boom.

Context

Nvidia is one of the world's most valuable technology companies due to its dominance in making computer chips that run artificial intelligence systems. Leadership changes at such a massive firm can cause major shifts in market confidence and stock prices. Large technology companies often use independent law firms to investigate serious executive misconduct to maintain public trust.