Nvidia CEO Jensen Huang Resigns After Affair Reports
Nvidia CEO Jensen Huang resigned Thursday after reports of two affairs, with CFO Colette Kress as interim CEO and former Synopsys CEO Harvey C. Jones as first board chair.
Nvidia (NVDA) said Thursday that CEO Jensen Huang is stepping down as chief executive and board member, effective immediately, after reports of two extramarital affairs. Chief Financial Officer Colette Kress will serve as interim CEO until a new leader is appointed, and former Synopsys CEO Harvey C. Jones will become the first-ever chair of Nvidia's board.
The resignation follows a report in The New York Times on Wednesday that Huang had a second extramarital relationship, with Kimberly Powell, Nvidia's vice president of healthcare, who reports to him. Earlier, Huang admitted to an affair with Alice Huang, an executive at Megaspeed, a Singapore-based cloud provider and Nvidia customer that U.S. intelligence officials believe is linked to China's Ministry of State Security. CNBC confirmed the Nvidia board met on Wednesday to discuss whether to oust Huang.
Kress said in the company statement that "NVIDIA's strength has always come from its people" and that the team would build on the foundation Huang created over 33 years. Huang co-founded Nvidia in 1993 and led its shift from gaming hardware to the center of the artificial intelligence boom.
Nvidia's stock was down 10.4% in premarket trading as of 8:59 a.m. ET, according to CNBC. Before the resignation, several Wall Street analysts told CNBC the stock could fall 20% if Huang left, given how critical he was to Nvidia's success; Nvidia's stock is already down more than 20% over the last month. Bernstein on Thursday cut its price target on Nvidia from $400 to $200. Stacy Rasgon, a senior analyst at Bernstein, told CNBC that Huang's alleged affair with a direct report made it much tougher for the board to leave him in position, and that it is unclear who could be the visionary to lead Nvidia next.
In delayed trading, Nvidia (NVDA) was up 2.87% at $173.73 and Advanced Micro Devices (AMD) was up 7.32% at $552.90, per the delayed quotes. Richard Reyle, chief investment officer at Questar Capital Partners, told CNBC that Nvidia's lack of a succession plan makes the stock uninvestable, though it does not make the broader AI trade uninvestable.
The next steps are not set: Nvidia has not named a permanent CEO or a date for its next earnings report, and the board's investigation is ongoing.