Nvidia Board Meets to Decide CEO Jensen Huang's Fate
Nvidia's board is meeting to decide whether to oust CEO Jensen Huang after reports of two extramarital affairs, while its shares fell more than 8% after hours.
Correction: Adds details from the ongoing board meeting, a second reported affair with an Nvidia executive, Huang's apology to staff, an analyst price scenario, and the delayed price reaction.
Nvidia's board is meeting to decide whether to oust CEO Jensen Huang, CNBC confirmed late Wednesday, following reports of two extramarital affairs — one with an employee and another with an alleged Chinese spy.
The Wall Street Journal first reported that the board was preparing to force out Huang, and Nvidia shares fell more than 9% in post-market trading after that report, according to CNBC. The New York Times separately reported that Huang had a romantic relationship with Kimberly Powell, Nvidia's vice president of health care.
The Times reported the alleged relationship was with Powell, whose bio on Nvidia's website says she is responsible for the company's worldwide healthcare business. Huang and Powell were reportedly captured on camera being affectionate at a hotel in San Jose, California in March, according to the Times.
The report comes days after Huang admitted to an affair with a woman U.S. intelligence officials believe is a spy for China's Ministry of State Security. Huang was romantically involved with Alice Huang, according to The Financial Times, and wrote to Nvidia staff on Sunday that he was unfaithful to his wife and was deeply sorry, according to CNBC.
Nvidia's board has opened an independent investigation and hired the law firm Wachtell, Lipton, Rosen & Katz to look into the spying allegations, CNBC reported. Nvidia and Powell did not respond to CNBC's request for comment.
Nvidia stock was down 7% this week prior to the after-hours drop on Wednesday and is on pace for its sixth straight weekly slide. Dan Ives of Yorkville Ives & Co. said in a note overnight that Jensen's days at Nvidia could be numbered, and that the stock will clearly be under pressure, but that the company will navigate this turmoil. Ives added that Nvidia's value is $300 per share with Jensen as CEO and $225 per share without him, according to CNBC.
In delayed trading, Nvidia shares were up 2.87% to $173.73. The board's decision, if it comes, would mark a turning point for a company whose chips power most of the world's AI training and inference workloads.
The next dated event is the board's decision, expected within 48 hours according to Ives's note.