Actions of Nvidia fell more than 7% after hours Wednesday after The Wall Street Journal reported that the company’s board was preparing to oust CEO Jensen Huang.
The news broke minutes after The New York Times reported that Huang was having an extramarital affair with another company executive.
The alleged relationship was with Kimberly Powell, vice president of healthcare at Nvidia, according to the report. Powell’s bio on Nvidia’s website says she is “responsible for the company’s global healthcare businesses, including hardware and software platforms for accelerated computing, AI and visualization that power the medical imaging, life sciences, drug discovery and healthcare analytics ecosystem.”
Huang and Powell were allegedly filmed being affectionate with each other at a hotel in San Jose, California, in March, according to the Times.
Nvidia did not immediately respond to CNBC’s request for comment. Heller, the crisis PR firm that Huang reportedly hired as early as last year, did not immediately respond to CNBC’s request for comment.
The report comes days after Huang admitted to having an affair with a woman that U.S. intelligence considers to be a Chinese spy. The CEO was romantically involved with Alice Huang, according to the Financial Times, who U.S. intelligence officials believe was a spy for China’s Ministry of State Security, the New York Times reported.
Nvidia stock chart.
Nvidia’s board of directors opened an independent investigation and commissioned the law firm Wachtell, Lipton, Rosen & Katz to look into the espionage allegations.
“I have been unfaithful to my wife. My actions have harmed her and our children. There is no excuse for what I did,” Huang wrote in the message to Nvidia staff on Sunday. “I am deeply sorry.”
Rumors of an affair between Huang and Powell have circulated for years, in part because Powell does not have a background in health or science, according to a former employee who asked to remain anonymous due to the sensitivity of the matter.
Nvidia’s stock is down 7% this week and is on track for its sixth consecutive weekly decline, reflecting broad concerns about the sustainability of artificial intelligence development. The AI infrastructure trade was particularly hard hit last week after the midterm elections, as Democrats won overwhelming majorities in both houses of Congress and dozens of ballot measures were passed that could make it harder to build data centers.
Huang has become synonymous with the AI industry, and he is often referred to by his first name “Jensen” by clients and competitors. Nvidia has been a major beneficiary of the AI boom as its chips are used to train models and run large AI workloads.
—CNBC’s Lora Kolodny and Kif Leswing contributed to this report
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