Nvidia's board is meeting to decide whether to oust CEO Jensen Huang, a source familiar with the matter told Reuters, as the world's dominant supplier of AI chips grapples with fallout from reports of two extramarital affairs involving its longtime leader.
Nvidia did not immediately respond to a request for comment on the board meeting, which went late into the night on Wednesday, said Reuters.
The meeting marks a sharp shift from Sunday, when Nvidia's board expressed confidence in Huang and his leadership team. Under Nvidia's bylaws, Huang can be removed "with or without cause" by a majority vote of directors. Nvidia has 11 directors and considers all but Huang independent.
Nvidia's stock slid around 7% in early Frankfurt trading on Thursday after the Wall Street Journal first reported that the company was preparing to fire Huang. If those losses hold, Nvidia will have lost about $600 billion in market value since the board announced its investigation into his relationship with a businesswoman called Alice Huang alleged to be a Chinese spy.
Revelations that US intelligence was probing Alice Huang for facilitating shipments of Nvidia chips to Chinese firms set off a series of events: Wall Street began raising questions about Nvidia's governance and Jensen Huang's personal conduct, while the company's board launched an internal investigation and hired outside counsel. Lawmakers also began to push for tighter curbs on chip exports to China.
China has denied the allegations. Reuters was not able to contact Alice Huang for comment.
"The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk," said Armina Rosenberg, portfolio manager and co-founder of Minotaur Capital, which holds Nvidia shares. "Losing Jensen would be a real blow."
Bernstein and Oppenheimer both downgraded Nvidia following the latest developments and Citi cut its target.
"A leadership transition creates an overhang on the stock given his central role in strategy, product vision, customer relationships, and investor confidence," Citi analysts wrote.
NO OBVIOUS SUCCESSOR
Huang's potential departure would leave a leadership vacuum at the roughly $4 trillion chipmaker he co-founded and built over more than three decades to become the top supplier of chips at the center of the global AI boom and US-China technological rivalry.
Huang, 63, has no obvious successor and owns about 3.6% of Nvidia's stock. He also has dozens of direct reports, underscoring the tight control he maintains over the company.
Bloomberg reported on Wednesday that Nvidia's board has been working with an outside firm to identify potential replacements for Huang, citing a person familiar with the situation.
Rosenberg said Chief Financial Officer Colette Kress, who has held the role for more than a decade, would be the natural choice as an interim CEO, but said the bigger question was who would lead Nvidia's technology roadmap longer term.
Odds on prediction market website Polymarket shifted sharply to show an 88% chance that Huang would resign or be removed by the end of the year. Odds for his successor favored Ian Buck, who oversees the business that serves Nvidia's data center clients.
The leadership upheaval comes just days before investors are set to hear from the company on its financial performance and outlook, with its quarterly results due on November 17.
Earlier on Wednesday, the New York Times reported that Huang had also had an extramarital affair with a company executive who reported to him. The relationship was with Kimberly Powell, Nvidia's vice president of healthcare, the New York Times said, citing five people who worked at the company.
When reached by phone on Wednesday and asked about his relationship with Powell, Huang said, "I don't think you should be talking to me directly." He then hung up, the New York Times reported.
Nvidia and Powell did not immediately respond to requests for comment. Reuters could not immediately verify the report.
MARKET FALLOUT
US stock futures sank, with Nasdaq futures down 1%. Micron fell nearly 2% and CoreWeave dropped 6% in after-hours trading. However, shares of rival chipmakers AMD and Broadcom rose 4% and 3%, respectively.
In Asia, Samsung Electronics rose about 1% while SK Hynix dipped 2%, as Nvidia partners and suppliers assess the potential ramifications of Huang's possible ouster.
Investors and analysts said while demand for Nvidia's chips would be unlikely to drop in the near term, the broader universe of companies backed by Nvidia — largely customers building data centers that will use its chips — might suffer.
"They are financing their customers. In these types of booms or bubbles, sometimes all it takes is a slowdown to shift it into the bust phase," said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.
INVESTIGATION WIDENS
In a memo to employees on Sunday, Huang acknowledged being unfaithful to his wife and took "full responsibility," but gave no details about the relationship.
US President Donald Trump said he had spoken to Huang on Monday and the CEO told him that he did not know the woman linked to him was allegedly a spy. Huang is one of Trump's closest allies in Silicon Valley, and the relationship between the two dates to at least 2025.
Huang faces a potential congressional subpoena if he doesn't respond to a request to provide a closed-door briefing about the allegations of his affair with a woman alleged to be a Chinese spy.
