Nvidia is reportedly preparing to remove chief executive Jensen Huang following US media reports alleging that he had a second extramarital affair. The reports have raised questions about leadership at the chipmaker, which has no succession plan in place, according to Sky News.
The Wall Street Journal and The New York Times reported that Huang had a relationship with an executive who reports to him. Those allegations follow his admission of an affair with a woman who has been alleged to be a Chinese spy. A board meeting was reportedly scheduled to consider his future at the company.
Nvidia shares fell more than 8% in extended trading following Wednesday's close, reaching $160, or £120. The price was the lowest in more than a year. According to the main account in the source report, the decline extended a three-day sell-off that erased approximately $600bn, or £451bn, from the company's market value.
Earlier in the week, Nvidia opened an investigation into allegations that Huang had been targeted by a foreign intelligence operation. Donald Trump said the FBI was also examining the allegations. The reported investigation adds another issue facing the company as its board considers the chief executive's position and investors respond to the developments.
The reported relationship with an executive who answers to Huang also brings Nvidia's rules on personal relationships into focus. Its code of conduct instructs employees to avoid circumstances in which their actions create a conflict, including those involving personal relationships. Policies restricting relationships between managers and their subordinates are common among companies.
Huang has been instrumental in Nvidia's rise, helping turn the chipmaker into one of the world's most valuable companies. Some have described him as “the godfather of AI”. His departure would leave a leadership gap at a business described in the report as one of America's most important enterprises.
The absence of a succession plan could complicate any effort to replace him. Bruce Zaro, management director at Granite Wealth, credited Huang with leading Nvidia's remarkable growth and questioned whether another leader could take over if he resigned or was forced out. His comments highlighted the uncertainty surrounding who might succeed Huang should the board decide that he must leave.
