NVIDIA board to decide whether to dismiss CEO Huang after two affair reports; shares fall more than 8% - ITmedia NEWS

　The board of U.S. chipmaker NVIDIA will meet on the night of Nov. 11 (local time) to decide whether to dismiss CEO Jensen Huang, according to sources familiar with the matter who spoke to Reuters. NVIDIA, which dominates the AI semiconductor market, has been rocked by two reports alleging romantic affairs involving Huang, who has served as its top executive for many years.

　NVIDIA did not immediately respond to a request for comment on the board meeting.

　The board expressed confidence in Huang and the company’s management on the 8th, making this meeting a sharp reversal. Under NVIDIA’s bylaws, Huang can be dismissed “with or without cause” if a majority of the directors vote in favor. The board has 11 members, all of whom except Huang are classified as independent directors.

　NVIDIA shares fell more than 8% in extended trading after The Wall Street Journal first reported that preparations were being made to dismiss Huang. If the decline continues, NVIDIA will have lost roughly $600 billion in market value since the board announced an investigation into Huang’s relationship with entrepreneur Alice Huang, who is suspected of being a Chinese spy.

　The latest developments began when it became known that U.S. intelligence agencies were investigating Alice Huang on suspicion of helping ship NVIDIA semiconductors to Chinese companies. The revelations sparked questions on Wall Street about NVIDIA’s corporate governance and Huang’s personal conduct, and the company’s board launched an internal investigation by retaining outside legal counsel. Lawmakers have also called for tighter export restrictions on semiconductors to China.

　Armina Rosenberg, co-founder and portfolio manager of investment firm Minotaur Capital, which holds NVIDIA shares, noted that “the market is beginning to price in an NVIDIA without its founder as a highly likely outcome rather than as a tail risk—a risk with a low probability of occurring but large losses if it does.” She added, “Losing Jensen would be a major blow.”

No clear successor

　Huang’s departure would leave a leadership vacuum at NVIDIA, whose market capitalization is about $4 trillion. Huang co-founded the company and over more than 30 years built it into the semiconductor industry leader at the center of the global AI boom and the U.S.-China race for technological dominance.

　The 63-year-old Huang has no clear successor and owns about 3.6% of NVIDIA’s stock. He has dozens of direct reports, indicating the extent of his tight control over the company.

　Bloomberg reported on the 11th, citing people familiar with the matter, that the board is working with an outside company to identify candidates to succeed Huang.

　Rosenberg considers Colette Kress, who has served as CFO for more than 10 years, a natural candidate for interim CEO. At the same time, she pointed to a bigger issue: who will lead NVIDIA’s technology roadmap over the long term.

　On the prediction-market website Polymarket, the probability of Huang either resigning or being dismissed by year-end surged to 88%.Ian Blackwell, who oversees the data-center business, is considered a leading candidate to succeed him.

The turmoil in the company’s leadership arose just days before investors were scheduled to be briefed on NVIDIA’s performance and outlook. The company is due to announce its quarterly earnings on the 17th.

On the 11th, the New York Times reported that Huang had also had an affair with a senior executive reporting directly to him. Citing five people who had worked at NVIDIA, it said the other party was Kimberly Powell, the company’s vice president in charge of healthcare.

According to the New York Times, when asked by phone on the 11th about his relationship with Powell, Huang replied, “I don’t think you should be talking to me directly,” and hung up.

NVIDIA and Powell did not immediately respond to requests for comment. Reuters was also unable to verify the report immediately.

Impact on the Markets

U.S. stock-index futures fell, with Nasdaq futures down 1%. In after-hours trading, Micron fell nearly 2% and CoreWeave fell 6%. Meanwhile, rival chipmakers AMD rose 4% and Broadcom gained 3%. In Asia, South Korea’s Samsung Electronics rose about 1%, while fellow South Korean company SK hynix fell nearly 1%.

Investors and analysts contend that while demand for NVIDIA chips is unlikely to decline in the short term, companies backed by NVIDIA could take a hit. Many of the businesses it supports are customers building data centers that use NVIDIA semiconductors.

Nick Feres, chief investment officer at Singapore-based asset manager Vantage Point Asset Management, said, “(NVIDIA is) funding its customers. In a boom or bubble like this, even a slight slowdown can tip things into a collapse.”

Expanding Investigation

On the 8th, Huang admitted in a memo to employees that he had been unfaithful to his wife and said he would take “full responsibility,” but gave no details about the relationship.

U.S. President Trump said he had not spoken with Huang about the allegations, while expressing support for Huang, with whom he has a close relationship.

There have been calls for Huang to give a private briefing on the allegations of an affair with a Chinese spy, and he could face a congressional subpoena if he declines.

Also on the 11th, Axios reported, citing senior administration officials, that U.S. Commerce Secretary Howard Lutnick had been slow to act against companies suspected of smuggling NVIDIA chips into China. The White House and a spokesperson for Lutnick did not immediately respond to requests for comment.

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