- Nvidia’s board is meeting to decide whether to oust CEO Jensen Huang, CNBC confirmed late Wednesday, after The Wall Street Journal reported that the board was preparing to force him out. The Journal’s story landed minutes after The New York Times reported that Huang had a romantic relationship with Kimberly Powell, Nvidia’s vice president of health care, and shares fell more than 9% in post-market trading.
- The Times report came days after Huang admitted to an affair with Alice Huang, a woman U.S. intelligence officials believe was recruited by China’s Ministry of State Security. Nvidia’s board has opened an independent investigation and hired Wachtell, Lipton, Rosen & Katz to look into the spying allegations. The company and Powell did not respond to CNBC’s request for comment.
- Wall Street is treating a sudden exit as a material valuation event. Gene Munster of Deepwater Asset Management said a founder-led company with no clear number two is “a recipe for a 20% correction,” and Seaport’s Jay Goldberg also pointed to a 20% near-term hit, noting Huang has 70 direct reports and is the only CEO Nvidia has ever had. Shares fell nearly 10% over the first two trading days of the week before rebounding in Wednesday’s regular session, then dropped about 8% in extended trading after the Journal report, CNBC said.
- Most of Huang’s Nvidia shares are co-owned with his wife, Lori Huang, and held in trusts — about 800 million shares, CNBC reported — while he holds about 70 million shares on his own and has limited economic control over the company. Nvidia’s stock was already down 7% this week before the after-hours drop and is on pace for its sixth straight weekly slide, reflecting broader concern about the AI build-out after Democrats won sweeping midterm majorities.
What Happened?
Huang wrote to staff on Sunday that he was unfaithful to his wife, that his actions hurt her and their children, and that there is no excuse. The Times said he and Powell were captured on camera being affectionate at a hotel in San Jose in March. Powell has led Nvidia’s healthcare group since 2017; CNBC noted that healthcare is a smaller business next to the company’s AI systems and GPUs. Wedbush’s Matt Bryson compared Nvidia’s valuation with TSMC, saying TSMC was trading at about 15 times next year’s earnings versus closer to 10 times for Nvidia, and that some of that gap may reflect concerns about Huang’s future.
Why It Matters?
Huang has become synonymous with the AI industry, and Nvidia’s chips sit at the center of model training and inference. A messy departure would not just be a governance story; it would raise questions about customer relationships, China policy lobbying and the firm’s unusually CEO-centric structure. Goldberg’s point about 70 direct reports is the operational risk in a single sentence. At the same time, StoneX’s Cody Acree and D.A. Davidson’s Gil Luria told CNBC the franchise can be managed forward if there is an orderly transition, because the company’s industry agreements and product cadence would not change overnight.
What’s Next?
The immediate question is whether the board reaches a decision and whether it names a successor or an interim leader. Under Nvidia’s bylaws, directors can remove the CEO with or without cause by majority vote, but the company has not announced a final decision. Several lawmakers, including Sen. Kevin Cramer, R-N.D., Rep. Suhas Subramanyam, D-Va., and Rep. Don Bacon, R-Neb., have called for Huang to resign; Cramer told CNBC that “as a matter of his own conscience, he should resign.” Elon Musk, asked on X whether he would hire Huang, replied that “that would be an honor.” Investors will also watch whether the after-hours decline deepens at Thursday’s cash open.
