Nvidia’s board of directors met on Wednesday to discuss the future of CEO Jensen Huang following reports of two extramarital affairs, Reuters reported.
The chipmaker’s stock price tumbled about 8 percent in after-hours trading as questions swirled over Huang’s position, Al Jazeera reported. The potential departure of the co-founder, who helped build the company since 1993, could leave a leadership vacuum at the roughly $4 trillion chipmaker, HuffPost reported.
As Al Jazeera reported, Nvidia shares dropped 8.6 percent during Wednesday’s after-hours session amid uncertainty regarding Huang’s leadership of the $4.2 trillion firm.
The company’s shares had already seen a decline of 9.5 percent between Monday and Tuesday, following Huang’s weekend acknowledgment of his extramarital relationship and the news of the board’s investigation, according to reports from Nmas.com.mx. Although the stock rose 2.9 percent during Wednesday’s regular session, it subsequently plummeted during after-hours trading, erasing those gains.
The board meeting follows revelations regarding Huang’s personal conduct. Al Jazeera reported that Huang engaged in an extramarital relationship with an Nvidia employee and had an affair with a woman accused of working with Chinese intelligence services.
The New York Times reported that the relationship with the company executive was with Kimberly Powell, Nvidia’s vice president of healthcare. When asked about his relationship with Ms. Powell, Huang told the New York Times, “I don’t think you should be talking to me directly,” before hanging up.
Nvidia and Powell did not immediately respond to requests for comment, HuffPost reported. The board of directors launched an investigation into Huang’s conduct on Sunday, Al Jazeera reported. This investigation was prompted by reports of his relationship with a Chinese businesswoman, which has led to a loss of approximately $600 billion in market value this week, according to HuffPost and Nmas.com.mx.
The situation has also drawn political scrutiny. Huang, a confidante of US President Donald Trump, has lobbied for more relaxed export restrictions on high-end chips to China.
While Trump has voiced support for the executive, calling him an honorable guy who has done an amazing job for our country, Huang faces a potential congressional subpoena if he fails to provide a closed-door briefing regarding the allegations of his close relationship with a Chinese businesswoman, Al Jazeera reported.
HuffPost reported that Nvidia’s stock market value has decreased by roughly $600 billion this week, taking into account the selloff during Wednesday’s after-hours trading. The company’s stock had previously reached a low of more than 9% during the day before recovering some losses, according to reports from Nmas.com.mx.
Nvidia is the world’s dominant supplier of AI processors, providing the hardware used to power models. Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore, told Reuters that the company provides capital to its customers during the investment boom.
Industry experts suggest that replacing Huang would be a massive undertaking. “Jensen is Nvidia, without him the company loses it central, animating spirit,” Jay Goldberg, a senior analyst at Seaport Research Partners in San Francisco, told Al Jazeera.
The organization is built around him and replacing him will be very painful organizationally, and impossible to do personality wise.
Al Jazeera
Dan Ives, senior managing director at Yorkville Ives, also characterized Huang as the “hearts and lungs” of the company, Al Jazeera reported. Ives suggested that the company might have to move forward without Huang, a scenario he described as feeling like a “Twilight Zone” episode narrative.
Earlier coverage: Nvidia Board Prepares to Decide Future of CEO Jensen Huang