Nvidia's Board Weighs Ousting Jensen Huang After Affair and China Spy Allegations

Nvidia's board of directors met late Wednesday to decide the fate of Jensen Huang, the chipmaker's co-founder and chief executive of 33 years, after a week in which an admitted extramarital affair collided with allegations that a woman tied to the relationship is suspected by U.S. intelligence agencies of acting on behalf of China's security services. No public decision had emerged by Thursday morning, but people familiar with the board's deliberations told CBS News that directors are actively preparing to remove him.

The crisis traces to Nov. 8, when Nvidia opened an internal investigation into reports that Huang had been targeted by a foreign intelligence operation. U.S. officials have connected him to Alice Huang, no relation, a former senior executive at Megaspeed International, a Singapore-based firm that bought nearly $5 billion worth of Nvidia chips and other hardware and was suspected of ties to China's Ministry of State Security. On Sunday, Huang sent a message to employees acknowledging he had been unfaithful to his wife.

There is no excuse for what I did. I am deeply sorry.

Jensen Huang, in a message to Nvidia employees

Then, on Wednesday, the New York Times reported a second relationship: an affair with Kimberly Powell, Nvidia's vice president of health care, who could not be reached for comment. The newer allegation, laid out in Fortune's reporting, deepened concerns inside the company that Huang's conduct violates Nvidia's code of conduct, which warns employees against relationships that create a conflict of interest.

A board with no obvious successor

Nvidia shares fell more than 8%, to $159.51, in after-hours trading Wednesday as the ouster reports spread, part of a slide that has erased more than $450 billion of market value since the investigation opened, according to Yahoo Finance's live markets coverage. The company's 11-member board, which includes Huang himself, has no chair and, people close to the matter say, no settled succession plan — a gap that has suddenly become urgent. Nvidia is reportedly working with an outside recruiting firm to identify potential replacements, with Chief Financial Officer Colette Kress and lead independent director Stephen Neal, a Cooley LLP senior counsel, mentioned as possible interim choices. A separate newsroom's own account of Wednesday's board meeting described directors as still far from a consensus on timing, even as the succession search accelerates behind the scenes.

Huang has run Nvidia with an unusually flat structure, overseeing roughly 60 direct reports and no chief operating officer. He co-founded the company in 1993 and has led it through its transformation into the world's dominant maker of AI accelerator chips; revenue for the first half of its current fiscal year reached $96 billion, up 85% from a year earlier, and Kress has told investors to expect 70% growth in the following fiscal year.

Analysts call Huang irreplaceable — for now

Wall Street's reaction has been blunt. "Obviously negative," Adam Crisafulli of Vital Knowledge said, noting that Huang is the most prominent executive at the industry's most prominent company. Dan Ives of Yorkville Ives went further, saying Huang "is not replaceable" by another chief executive or an interim stand-in, and that investors will now weigh succession, near-term strategy and whatever the various government inquiries ultimately turn up. Wharton management professor Michael Useem said simply that rarely has a board faced this much pressure, adding that a well-prepared board would already have identified likely successors.

President Trump has so far stood by Huang, calling him an "amazing guy" and an "honorable man" since Sunday's disclosures, and officials have said the FBI is examining both the business and personal ties between Huang and Alice Huang. Nvidia's board has said it has no reason to believe that national security or company secrets were compromised but that its inquiry would examine all available information. Lawmakers are expected to press Nvidia executives on whether its chips have reached China through intermediaries, a long-running concern given export controls on advanced AI hardware.

Yale management professor Jeffrey Sonnenfeld has compared the situation to McDonald's 2019 ouster of chief executive Steve Easterbrook over an employee relationship — a case the SEC later pursued for misleading investor disclosures, resulting in a five-year bar and a $400,000 penalty for Easterbrook, who neither admitted nor denied the agency's findings. Whether Nvidia's board acts before week's end, analysts say, will shape how investors price both the company's near-term execution and the broader question of whether any single executive should hold as much operational control as Huang has for three decades.