Nvidia appoints interim chief executive as Jensen Huang resigns

Nvidia has begun looking for a new chief executive as co-founder Jensen Huang resigns following reports of two extramarital affairs, including one with a Chinese businesswoman whom US authorities suspect of spying for Beijing.

Chief financial officer Colette Kress will lead the company temporarily, according to its announcement on Thursday (November 12). The search for a permanent replacement will cover candidates already working at Nvidia and those outside the business.

Nvidia has also appointed its first board chair, choosing director Harvey Jones, who previously led Synopsys as chief executive. Huang is leaving the board as well.

The change leaves the roughly US$4 trillion company facing uncertainty. Huang owns about 3.61% of the business, placing him fourth among its shareholders.

The artificial intelligence (AI) industry is also losing its foremost advocate. Huang channelled Nvidia’s increasing cash reserves into cloud computing providers, suppliers and the sector’s largest laboratories, helping finance a network that his departure could disrupt.

“The risk is not that Nvidia suddenly loses its technology roadmap ... that roadmap is largely visible for the next several years,” said Michael Feldman, a portfolio manager at ClearBridge Investments.

“The risk is execution. Jensen has been the chief conductor of an extraordinarily complex system,” he added. “In a world with real bottlenecks, that coordination is a competitive advantage in itself.”

The board had opened an investigation earlier this month into whether Huang was the target of a foreign intelligence operation. Independent directors were leading the inquiry with external legal advisers, and the board expressed confidence in him when it was announced.

Reports of an affair with Chinese businesswoman Alice Huang had put the married, 63-year-old executive under growing pressure. She previously held an executive role at Megaspeed, a cloud computing company based in Singapore.

US authorities have concluded that Alice Huang was a Chinese intelligence asset, according to the reports. Beijing has denied that she is a spy.

Photographs place Alice Huang and Jensen Huang together in Taiwan, Singapore and California. The two are not related.

Megaspeed has also attracted scrutiny in Washington. Media reports describe an investigation into suspicions that it helped China obtain advanced AI chips subject to US export restrictions. The company has a coveted place among Nvidia’s official cloud partners and receives priority access to its chips.

The New York Times reported on Wednesday that Huang had also had an affair with Kimberly Powell, Nvidia’s vice president of healthcare, who reported directly to him. A person familiar with the matter said directors met that day to consider removing him following the reports.

Huang’s exit could have substantial implications for US rules on chip exports. He has pressed for continued access to the Chinese market and has close ties with US President Donald Trump.

Trump praised Huang on Sunday for having “done an amazing job for our country”. He also recounted Huang telling him that he had not known the Chinese woman with whom he had an affair was a spy.

Nvidia’s rise began with a reputation for high-quality gaming graphics. The capacity of its chips to handle many calculations simultaneously subsequently made them central to AI’s expansion and a strategic asset in the US-China competition to dominate AI. That shift made Nvidia the world’s most valuable company.

Huang became a celebrity in the process. Crowds in Taiwan and South Korea sought his autograph on books, posters and even their bodies, and merely naming a company at an event could move its share price.

Investors were already losing confidence in AI shares as technology giants, traditionally known for their substantial cash reserves, used up cash at an increasingly rapid pace and accumulated more debt. Those developments had deepened doubts about whether the AI boom would pay off.

Nvidia’s share price fell by more than 12% shortly after trading began, leaving the total value of its shares heading for a drop of about US$500 billion. The decline also helped push prices lower elsewhere in the stock market.

Source: Reuters