In a significant development, Nvidia's CEO, Jensen Huang, is facing the possibility of being ousted due to allegations of an extramarital affair with Kimberly Powell, a senior company executive. This comes amidst a widening controversy surrounding his reported personal relationships, including links to a Chinese businesswoman suspected of spying for Beijing. The chipmaker's board is scheduled to meet on Wednesday to discuss Huang's potential removal. If he is removed, this could create a major leadership vacuum at the nearly $4 trillion company, which Huang co-founded in 1993 and transformed into the world's leading supplier of AI chips. Nvidia's shares have fallen around 8% following the news, with the company losing nearly $600 billion in market value this week. The board is reportedly working with an outside firm to identify potential successors due to a lack of a clear succession plan.
The controversy started with allegations about Huang's relationship with Alice Huang, a Chinese businesswoman linked to facilitating shipments of Nvidia chips to Chinese companies by US intelligence. The New York Times reported on Wednesday that Huang was also involved in an extramarital relationship with Kimberly Powell, Nvidia's vice president of healthcare, who reportedly worked under him. When contacted about the alleged relationship, Huang declined to comment, stating "I don't think you should be talking to me directly," before hanging up.
The potential ouster of Huang could create a significant leadership vacuum at Nvidia, as he owns approximately 3.6% of the company's shares and maintains close control over it. Analysts have warned that an immediate removal could prove challenging given the absence of a clear succession plan. In a memo to employees, Huang acknowledged being unfaithful to his wife and took "full responsibility," without providing details about the relationship. The board launched an investigation into whether Huang had been targeted by a foreign intelligence operation on the same day.
The leadership uncertainty has rattled financial markets, with US stock futures declining and Nasdaq futures falling around 1%. In contrast, shares of rival chipmakers AMD and Broadcom rose approximately 4% and 3% respectively, amid expectations that they could gain market share if Nvidia faces prolonged disruption. The controversy may also have wider implications, with Huang potentially facing further scrutiny in Washington and a possible congressional subpoena if he fails to respond to a request for a closed-door briefing regarding his alleged relationship with the Chinese businesswoman and claims that information was passed to Beijing.