Nvidia’s stock price fell after market close Wednesday following news that the chipmaker the board of directors prepares to oust long lasting CEO Jensen Huang.
Nvidia this week launched an investigation into Huang, who admitted to have an extramarital affair. U.S. intelligence agencies linked the CEO to a Chinese business executive, Alice Huang (no relation), suspected of being an asset of China’s Ministry of State Security.
The Trump administration is aware of the Nvidia board’s plans, sources told CBS News. The Wall Street Journal was first to report that board members were preparing to remove Huang.
Nvidia shares fell more than 8%, to $159.51, in after-hours trading. The decline continues a sharp decline in the company’s market value, which has lost more than $450 billion since Nvidia announced the investigation into Jensen Huang’s conduct on November 8.
Jensen Huang, co-founder of Nvidia in 1993, is considered in many circles as the face of the booming artificial intelligence sector, with the company’s advanced chips providing the critical computing resources that power cutting-edge AI models.
Huang’s departure would be a blow to Nvidia, which lacks obvious successors to take his place, according to Wall Street analysts.
“The news is obviously negative, because Jensen is (arguably) the most prominent executive at the most important company at the center of the world’s most important industry – someone who predicted the rise of AI years before ChatGPT came along and ensured that the company he founded would be ready to take advantage of it,” Vital Knowledge’s Adam Crisafulli said in a report.
Nvidia’s Code of Conduct
Corporate governance experts said Jensen Huang’s alleged relationship with Alice Huang appears to violate Nvidia’s code of conduct. This policy emphasizes that personal relationships could create a conflict of interest for Nvidia, while Huang himself specifies in the code of conduct that the company’s workers have a responsibility to “maintain high ethical standards.”
Nvidia’s code also asks employees to consider whether they could defend an action if it were made public on social media or known to their colleagues. Otherwise, the policy says, “do not proceed.”
In a message to company employees on Sunday, Huang admitted to having an affair and apologized to his wife and their two children, who also work at Nvidia. “There is no excuse for what I did. I am deeply sorry,” he wrote.
Nvidia’s 11-person board of directors includes Huang, although the other board members are designated as independent, according to a regulatory filing.
President Trump said this week that the FBI was also investigating romantic and business ties between Jensen Huang and Alice Huang, who was a senior executive at Megaspeed International. The Singapore-based company is one of Nvidia’s largest overseas customers, purchasing nearly $5 billion in AI chips and other advanced hardware.
The troubles at Nvidia are also facing scrutiny in Congress, with lawmakers expected to question the company’s executives over whether its chips are being routed to China through other countries.
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