Nvidia’s stock dives as board weighs move to oust CEO Jensen Huang

Shares of US technology giant Nvidia fell by more than eight per cent in after-hours trading on Wednesday following reports that the company’s board of directors was considering removing its chief executive officer, Jensen Huang.

The development comes days after Nvidia launched an investigation into Huang’s conduct following his admission that he had an extramarital affair.

According to CBS News, citing sources familiar with the matter, the company’s board is preparing to remove the long-serving executive, although no final decision was announced in the report.

The Wall Street Journal first reported the board’s alleged plans, while sources told CBS News that the administration of US President Donald Trump was aware of the development.

Nvidia shares dropped more than eight per cent to $159.51 in after-hours trading.

The company had reportedly lost more than $450 billion in market value since announcing an investigation into Huang’s conduct on November 8.

Investigation raises concerns over alleged business ties

The investigation reportedly centres on Huang’s relationship with Alice Huang, a Chinese business executive who is not related to him.

US intelligence agencies have linked Alice Huang to China’s Ministry of State Security, according to the report, although the allegations have not been independently established.

Alice Huang was a senior executive at Singapore-based Megaspeed International, which has purchased nearly $5 billion worth of Nvidia artificial intelligence chips and other advanced hardware.

President Trump also said the FBI was investigating the alleged romantic and business connections between the two individuals.

Corporate governance experts cited in the report said the alleged relationship could raise concerns under Nvidia’s code of conduct, which warns employees against personal relationships that may create conflicts of interest.

In a message to employees on Sunday, Jensen Huang acknowledged having an affair and apologised to his wife and their two children, both of whom also work at Nvidia.

“There is no excuse for what I did. I am deeply sorry,” he wrote.

Analysts warn of uncertainty without Huang

Huang co-founded Nvidia in 1993 and has led the company through its transformation into one of the world’s most influential technology businesses.

Its advanced processors are widely used to power artificial intelligence systems, making the company central to the rapid expansion of the global AI industry.

Analysts have warned that his possible departure could create uncertainty because Nvidia has no obvious successor with a comparable profile.

Adam Crisafulli of Vital Knowledge described the development as negative for the company, noting Huang’s importance to Nvidia and the wider artificial intelligence industry.

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Dan Ives, a technology analyst at Yorkville Ives, said investors would now be assessing potential successors, the effect of a leadership change on the company’s strategy and the possible outcome of government investigations.

“Jensen is not replaceable by another CEO or group of interim executives, but Nvidia likely now has to move on without Jensen at the helm, which seemed like a Twilight Zone episode narrative before Sunday afternoon when the news broke,” Ives said.

Congress raises questions over chip exports

The controversy has also attracted attention in Washington, where lawmakers are expected to question Nvidia executives about concerns that its advanced chips could be reaching China through third countries.

Nvidia’s 11-member board includes Huang, while the other directors are designated as independent, according to a regulatory filing.

The company has not announced a final decision on his position in the report.

Any departure by Huang would represent a major leadership change for Nvidia at a time when demand for artificial intelligence computing technology remains central to its business.

(CBS News)