The board of Nvidia is finalizing the dismissal of its CEO and founder, Jensen Huang, following the revelation of a new infidelity on Wednesday. While the first extramarital affair, confirmed by him in a letter to employees, involved an alleged Chinese spy, the one reported by The New York Times today points to Kimberly Powell, a vice president at the same company and thus one of his subordinates.
According to company sources cited by The Wall Street Journal and The New York Times, the board plans to meet soon to make a decision about his future. Until now, the main analysis was that Huang is too important, too big to fall. He founded the company, pivoted it towards Artificial Intelligence, making it the most valuable in the world, has made many executives wealthy, has all the connections (especially with President Donald Trump), and there is no natural or prepared successor to take over immediately. But the string of scandals is too significant to try to move on with just an apology and a reprimand, especially as stock prices have plummeted and exposure to China has surfaced.
Huang has become a global celebrity. Not only at the corporate level but also in the media. He has created an iconic look with his leather jackets, reminiscent of Steve Jobs. He is an idol in his native Taiwan, signs autographs at conventions worldwide, his talks sell out quickly, and his podcast interviews have millions of downloads. He is the only person whom figures like Elon Musk or David Ellison of Oracle beg to accept their money and provide them with more chips. With over 3.5% of the shares, he is the largest shareholder, and his children hold important positions.
Moreover, South African magnate and Tesla CEO Elon Musk has stated that "it would be an honor" to hire Jensen Huang. Musk and Huang have maintained a close relationship for at least a decade -- both accompanied President Donald Trump on his official visit to China earlier this year -- and Nvidia is the main supplier of graphics processing units (GPUs) that Tesla uses to train its AI models applied to autonomous driving and robotics.
Additionally, he has such influence over the Trump administration that he and his team have managed to navigate bans and even halt investigations by the Department of Commerce. Currently, Nvidia controls about 90% of the chip market used in major AI projects, which are now driving the U.S. economy and supporting market gains.
Months ago, the U.S. press began discussing his relationship with Alice Huang, a senior executive at Megaspeed, a data company based in Singapore and one of Nvidia's most important clients. However, it did not have much impact until recent information was published indicating that, according to U.S. intelligence agencies, the woman works for Chinese intelligence spying on the businessman.
This has indeed caused an earthquake and has given momentum to short sellers who have long warned of the danger posed by the company's exposure to Beijing. Huang acknowledged in a letter to his employees that he had been unfaithful to his wife, similar to Bill Gates at Microsoft, Brian Krzanich at Intel, or Steve Easterbrook (all fallen from grace or dismissed), and apologized, which did not prevent a massive stock market crash. In just the last two sessions, he has lost about $430 billion in market capitalization. Overall, shares have fallen around 9.5% since the scandal broke, wiping out nearly two trillion in value.
Now, The New York Times has uncovered a second extramarital affair with Kimberly Powell, Nvidia's health vice president, which not only violates company rules but also raises further doubts about his leadership. President Trump stated on Tuesday that Huang, whom he calls a friend and with whom he spoke on the phone shortly after the letter acknowledging the infidelity became public, is "an honorable man."
Both were recorded on video "showing affection in a hotel in San Jose, California, during a Nvidia conference in March," according to two people who worked at the company. There is a video of this, and according to the newspaper, "Mr. Huang's bodyguards saw the witness with the phone and stopped him. They later asked him to sign a non-disclosure agreement."
Last week, Nvidia's board opened an official investigation, assigning it to the law firm Wachtell, Lipton, Rosen & Katz. Additionally, Republican leaders from three influential House committees have also requested Huang to appear behind closed doors to explain his relationship with Alice Huang, the alleged Chinese spy, and the company's exposure.