Nvidia's board is preparing to oust founder and chief executive Jensen Huang after he had two extramarital affairs, The Wall Street Journal reported on Wednesday, in a stunning escalation of a scandal that has already wiped about $600 billion off the chipmaker's market value. The board plans to meet on Wednesday to decide Huang's future, and Nvidia shares fell about 8% after hours.

Key Points

• The Wall Street Journal reported on Wednesday, November 11, that Nvidia's board is preparing to remove Jensen Huang, 63, after two affairs — with Alice Huang, a Megaspeed executive US intelligence believes works for Chinese intelligence, and, per The New York Times, with senior Nvidia executive Kimberly Powell.
• The board plans to meet Wednesday to decide whether to oust him, a Reuters source confirmed.
• Nvidia shares fell about 8% after hours, nearly 10% at one point, after closing at $173.73, up 2.92%.
• Huang admitted on Sunday, November 8, that he had been "unfaithful to his wife" and apologised for violating his family's and his employees' trust.
• Huang is Nvidia's largest individual shareholder (about 3.6% of the stock), rejects succession planning, and has roughly 60 direct reports, with no obvious successor.

What Happened

The Journal reported on Wednesday, citing people familiar with the matter, that the board has moved from investigating Huang to preparing his removal. The board announced an independent probe on Sunday, November 8, the same day Huang admitted infidelity, saying it had "no reason to believe" national security or company secrets were compromised. Three days later, directors plan to meet Wednesday to decide whether he should go.

The second affair, reported on Wednesday by The New York Times, involves Kimberly Powell, a senior Nvidia executive who runs the company's healthcare business and reports directly to Huang. The first involves Alice Huang, a Megaspeed executive whom US intelligence officials believe works for Chinese intelligence. The Journal did not say when a decision would be announced, and Nvidia did not immediately respond.

Investors reacted swiftly. Shares fell about 8% after hours, nearly 10% at one point, after closing at $173.73, up 2.92%. Nvidia has lost about $600 billion in market value this week. Baird slashed its price target by 60% to $200, pointing to a possible change of chief executive.

Background: How the Huang Scandal Unfolded

The crisis began with a New York Times report alleging Huang had a close relationship with a Chinese businesswoman who passed information to Beijing. She was later identified as Alice Huang, a Megaspeed executive at a Singapore data company and a major Nvidia chip buyer in Asia. US intelligence believes she works for Chinese intelligence. Megaspeed denies wrongdoing, and China calls the claims "groundless speculation".

On Sunday, November 8, Huang told Nvidia employees in a letter that he had been "unfaithful to his wife", without giving details, and apologised for violating his family's and his employees' trust. The same day, the board announced an independent probe led by former acting US Attorney Joon Kim, saying it had "no reason to believe" national security or company secrets were compromised. Since then, The Information reported the affair facilitated at least $7.5 billion in chip shipments to Chinese firms, shareholders sued on November 9, and Senator Kevin Cramer called for Huang's resignation. See our report on Nvidia's board launching its probe of Huang and on shareholders suing Nvidia and Huang as the FBI probes the affair.

House Republicans have also pressed the issue: chairmen Brian Mast, John Moolenaar and Rick Crawford invited Huang to a closed-door briefing on November 18 and warned they could subpoena him if he refuses. President Donald Trump has stood by Huang, calling him an "amazing guy" and an "honorable man"; the FBI is also examining the matter.

Nvidia Board Prepares to Oust Jensen Huang

The question facing the board is not only whether Huang's conduct disqualifies him, but who could replace him. Huang founded Nvidia in 1993 and built it from a graphics-chip maker into the world's most valuable supplier of artificial intelligence hardware. He is the largest individual shareholder (about 3.6%), rejects succession planning, and has roughly 60 direct reports, with no obvious successor.

That makes the reported move extraordinary. Removing a founder-chief executive of a company this size is rare, and doing so mid-earnings cycle — Nvidia reports third-quarter results on Tuesday, November 17 — amid a federal investigation would be almost without precedent. The board must weigh keeping a chief executive whose private life has become a national security story against removing the man most associated with Nvidia's rise.

Reactions and Quotes

Huang's own words have been limited to his November 8 letter, in which he said he had been "unfaithful to his wife" and apologised for violating his family's and his employees' trust. He has not addressed either affair in detail, or commented on the reported plan to remove him.

The board's position has shifted in three days: on Sunday it said it had "no reason to believe" secrets were compromised and expressed confidence in Huang; by Wednesday, per the Journal, it was preparing to oust him. Trump has stood by Huang, calling him an "amazing guy" and an "honorable man", while Senator Kevin Cramer has called for his resignation and shareholders who sued on November 9 accuse the company of misleading investors.

Why It Matters

Nvidia's chips power the artificial intelligence systems at the centre of the US-China technology rivalry, and US export controls on those chips are among the most sensitive tools in American foreign policy. If a close associate of the chief executive passed information to Beijing — and if that relationship moved billions of dollars of chips to Chinese firms — the questions go far beyond one man's private life. Removing Huang would also shake the stock market: Nvidia is one of the world's largest companies, and its shares sit in millions of pension funds and retirement accounts. See our report on House Republicans threatening to subpoena Huang.

What Happens Next

All eyes are on Wednesday's board meeting, and whether a decision comes before markets open. Nvidia reports third-quarter earnings on Tuesday, November 17, when Huang — if still chief executive — would face analysts' questions about the probe, the chip shipments and the board's decision. The closed-door House briefing is set for November 18, if Huang attends or a subpoena forces him to.

Frequently Asked Questions

Is Jensen Huang being fired from Nvidia?
Not yet. The Journal reported the board is preparing to oust him, and directors meet Wednesday to decide. No decision has been announced.

Why would the board remove Huang?
Two extramarital affairs: one with Alice Huang, a Megaspeed executive US intelligence believes works for Chinese intelligence; a second, per the Times, with Nvidia executive Kimberly Powell.

How have Nvidia shares reacted?
Shares fell about 8% after hours on Wednesday, nearly 10% at one point, after closing at $173.73, up 2.92%.

Who would replace Huang?
None is obvious. Huang rejects succession planning, has about 60 direct reports, and is the largest individual shareholder, with about 3.6%.

What happens on November 17 and 18?
Earnings on November 17, and a closed-door House briefing on November 18, with a subpoena warning if Huang refuses.