Nvidia chief executive officer and co-founder Jensen Huang has resigned after a damaging personal scandal involving two alleged extramarital affairs, one of which has been linked to a woman accused by US intelligence of spying for China.
The 63-year-old technology billionaire announced his departure on Thursday, bringing an end to his 33-year leadership of the artificial intelligence chipmaker, which has become one of the world’s most valuable companies.
Nvidia’s Chief Financial Officer, Colette Kress, has been appointed interim chief executive officer pending the board’s search for a substantive successor. The company has not announced a permanent replacement.
Huang has also relinquished his seat on the company’s board, while Harvey Jones, a former chief executive of chip design software company Synopsys, has been appointed Nvidia’s first-ever board chairman.
The company did not disclose the reason for Huang’s resignation. However, his departure follows mounting controversy over reports of two extramarital relationships, including one involving a woman allegedly connected to China’s intelligence services.
The developments have rattled investors, with Nvidia shares falling more than 10 per cent in premarket trading on Thursday. The stock had already lost approximately 25 per cent of its value from its record high in early October.
The crisis comes at a particularly sensitive time for Nvidia, whose advanced graphics processing units (GPUs) have become critical infrastructure for the global artificial intelligence industry.
In a statement, the company’s new chairman, Jones, expressed confidence in the interim leadership and sought to reassure investors and customers about business continuity.
“The Board has full confidence in Colette and the leadership team, and we expect the company’s operations, customer commitments and product roadmap to continue without interruption,” he said.
Kress, who joined Nvidia in 2013 after holding senior finance positions at Cisco and Microsoft, pledged to build on the foundation established by Huang.
“I am committed to building on the extraordinary foundation Jensen created over the last 33 years,” she said.
Affairs trigger corporate crisis
The controversy began with reports that Huang, who has been married to his wife, Lori Huang, for more than four decades, had been involved in an extramarital relationship with Alice Huang, a senior executive at Singapore-based data centre company Megaspeed. The two women are not related.
Huang reportedly admitted to the affair on Sunday, triggering concerns about possible conflicts of interest and national security implications.
The controversy deepened after reports that US intelligence officials had circulated a memorandum earlier this year alleging that Alice Huang was an asset of China’s Ministry of State Security.
Beijing has rejected the espionage allegations.
Nvidia’s board had announced an investigation into reports that its chief executive might have been the target of a foreign intelligence operation, while initially expressing confidence in his leadership.
The situation deteriorated further on Wednesday when The New York Times reported evidence of a second alleged extramarital relationship involving Huang and Kimberly Powell, 48, Nvidia’s vice-president of healthcare.
Powell has been a prominent public representative of Nvidia’s efforts to expand the application of its artificial intelligence technology in healthcare and higher education.
The newspaper reported that the pair were seen behaving affectionately at a hotel during a conference in San Jose, California.
The revelations have raised questions about compliance with Nvidia’s corporate governance rules, which require employees to avoid conflicts of interest and specifically identify personal relationships as a potential source of such conflicts.
Meanwhile, Nvidia shareholders have filed a class-action lawsuit against Huang and the company, alleging that material information concerning the relationships was not disclosed to investors.
Leadership uncertainty at AI giant
Huang’s departure represents a significant leadership transition for Nvidia, which he co-founded in 1993 with Chris Malachowsky and Curtis Priem.
The company initially built its reputation designing graphics processors for computer gaming. Its technology has since become indispensable to the development and deployment of artificial intelligence systems, powering data centres operated by some of the world’s biggest technology companies.
Nvidia’s market value surged into the multi-trillion-dollar range as demand for its AI processors accelerated, making Huang one of the most influential figures in the global technology industry.
Its chips are largely manufactured by Taiwan Semiconductor Manufacturing Company, the world’s largest contract semiconductor manufacturer.
Huang had repeatedly avoided publicly identifying a potential successor, making Thursday’s announcement particularly consequential for investors and the wider technology sector.
Nvidia is expected to release its quarterly financial results as scheduled on November 17, with investors likely to scrutinise management’s assurances about operational stability and the implications of the leadership change.
