Nvidia board weighs ousting Jensen Huang after affair scandal, stock sinks 11%

Nvidia’s board of directors is meeting as soon as November 11 to decide whether to remove Jensen Huang as chief executive, the Wall Street Journal reported, according to TechCrunch. Huang co-founded Nvidia and has run the company for 33 years, turning it into the chipmaker behind much of the current boom in artificial intelligence.

The crisis traces back to November 8, when Huang admitted to an extramarital affair with a woman that U.S. intelligence officials have described as a suspected Chinese spy, according to TechCrunch’s reporting. On the evening of November 11, the New York Times reported a second affair, according to TechCrunch’s account of the story: Huang had also been involved with an executive who reports directly to him.

The fallout hit Nvidia’s share price quickly. The stock dropped about 8% in after-hours trading on November 11 and has fallen roughly 11% over the preceding five trading days, TechCrunch reported.

Part of what makes the situation precarious, according to TechCrunch, is that Nvidia has no clear successor in place. Huang has said he keeps about 60 executives reporting to him directly and delegates very little of the company’s day-to-day management. Bloomberg has reported that Nvidia is now working with an external recruiting firm to find potential successors who could take over as chief executive if the board decides to act.

What this means

If Nvidia’s board does remove Huang, it would strip the world’s most valuable chip supplier of the leader who built it from a graphics-card maker into the central supplier for AI data centers, with no designated second-in-command ready to take his place. The flat, highly centralized structure that TechCrunch describes, roughly 60 people reporting straight to Huang, makes an abrupt transition harder than at companies with a traditional executive bench, and it explains why Bloomberg’s report has Nvidia searching outside the company for candidates rather than naming an internal heir.

What remains unclear from the available reporting is what the board will actually decide, whether Huang will contest any attempt to remove him, and how Nvidia’s major customers and chip partners would react to a change at the top in the middle of heavy AI spending. None of the reports say whether Huang or Nvidia has issued a public response to the board discussions.

The board’s meeting, described by the Wall Street Journal as possibly happening within days, is the next concrete event to watch. Nvidia has not announced a timeline for when a decision, or an official statement, might follow.