Nvidia shares tumbled over 8% in after-hours trading on Wednesday as investors reacted to sudden leadership turmoil at the chipmaker. Co-founder and CEO Jensen Huang could lose his job after 33 years running the $4 trillion company. Board directors called an emergency evening session to decide his fate following new reports about his personal conduct at work.
According to The Wall Street Journal, the meeting comes right after The New York Times revealed Huang had an extramarital affair with Kimberly Powell, Nvidia’s vice president of health care. That news broke just days after Huang apologized to employees for a separate affair with Alice Huang, a Chinese businesswoman whom U.S. intelligence officials suspect of spying. Five people familiar with the company told The New York Times that bystanders saw Huang and Powell being affectionate at a San Jose hotel during March’s GTC conference.
Internal probes expose missing succession plan
Company security reportedly approached someone who filmed the hotel interaction and offered a nondisclosure agreement to keep it quiet. Nvidia’s board had already brought in law firm Wachtell, Lipton, Rosen & Katz to check whether the earlier affair posed any national security risks. Meanwhile, Republican leaders across three House committees asked Huang for a closed-door briefing about his contact with the Chinese executive.
Replacing the 63-year-old founder is complicated because Nvidia does not have a clear second-in-command ready to step up. Huang oversees roughly 60 direct reports on his own and previously told Bloomberg that he skips succession planning altogether (via CNN). Bloomberg notes that Nvidia is now working with an outside search firm to find potential CEO candidates in case directors vote him out.
Rival chipmakers climb during Wall Street selloff
Late-day selling erased nearly $400 billion in Nvidia’s market value, pushing the stock down about 11% over five trading days. While Nvidia slid, rival chipmakers actually caught a boost from the uncertainty. Shares of Advanced Micro Devices jumped 4.5% and Broadcom rose 2.9% as traders shifted money across the semiconductor sector.
Chinese officials pushed back against the espionage claims, calling the allegations baseless attempts to smear Beijing. Nvidia declined to comment on the board meeting, and Huang hung up when reporters called him directly about Powell. Whatever the board decides next will test whether the AI hardware leader can run smoothly without its longtime founder.
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