Nvidia shares fell more than 8 per cent in US after-hours trading on Wednesday following reports of a second alleged extramarital affair involving CEO Jensen Huang.
The stock drop erased a 2.9 per cent rebound from the regular trading session. This decline follows news that the company’s board is preparing to meet to decide the future of its chief executive, The Seattle Times reported.
CNBC reported that the board is preparing to oust Huang. This follows reports from The New York Times that he had a relationship with a company executive who reports to him.
That executive is Kimberly Powell, Nvidia’s vice president of healthcare, OfficeChai reported. Powell has led Nvidia’s health efforts for 17 years and heads the company’s healthcare business, CNBC noted. Her work includes partnerships with organizations such as the Mayo Clinic and IQVIA. Her enterprise AI platform supports more than 1,000 healthcare startups. Fast Company named her to its AI 20 list.
The New York Times reported that Huang and Powell were seen being affectionate at a hotel during a company conference in March.
Rumors regarding a relationship between Huang and Powell have been a topic of discussion for years. A former employee told CNBC on the condition of anonymity that this is partly because Powell does not have a background in science or health. Nvidia and Powell did not immediately respond to requests for comment, CNBC reported.
The crisis PR firm Heller reportedly was hired by Huang as early as last year. The firm did not immediately respond to inquiries, CNBC reported.
Nvidia’s code of conduct instructs employees to “avoid situations where our actions create conflict,” specifically including personal relationships. The company states it will “promptly investigates reports of misconduct,” according to The New York Times.
The corporate governance issues follow a separate scandal involving a woman whom U.S. intelligence officials believe is a Chinese spy. Le Monde reported that Huang addressed Nvidia employees on Sunday, November 8, regarding the affair. He expressed remorse for his actions toward his family.
Huang had a relationship with a woman who is believed by U.S. intelligence of being a Chinese spy, CNBC reported. Reports from The New York Times and the Financial Times suggest Alice Huang was recruited to spy on Jensen Huang to acquire information regarding Nvidia’s strategy and its microchips.
The investigation comes as the company faces scrutiny over its Chinese operations. The New York Times reported that Alice Huang, a former Megaspeed executive, was romantically involved with Jensen Huang. Alice Huang is about 42 years old.
A business card for Hexi presented Alice Huang as associated and executive director. Her office is located in the Lujiazui financial district in Shanghai, according to Reuters.
The investigation into Alice Huang’s role is part of a larger geopolitical tension. Beijing’s objective may have been to use this proximity to pressure Nvidia into requesting that Washington accept broader permissions to sell its best AI chips in China. China has denied the espionage claims.
The Chinese Ministry of Foreign Affairs described the reports as “spéculations sans fondement d’une tentative de salir l’image de la Chine,” Les Numériques reported.
Jensen Huang is scheduled to answer questions regarding his contacts with Alice Huang and Nvidia’s protections against espionage on November 18, OfficeChai reported. It is not yet known what the board will decide regarding his employment.
Earlier coverage: Nvidia CEO Jensen Huang Admits to Affair as Board Investigates