Nvidia’s board is preparing to remove Jensen Huang as chief executive, according to a Wall Street Journal report published at 22:44 UTC (14:44 in Santa Clara) on 11 November. The Journal said directors could meet as soon as Wednesday to decide the future of the man who co-founded the company in 1993, citing people familiar with the matter. Its report came about an hour after The New York Times said Huang had also had a relationship with a senior Nvidia executive who reports to him.
Reuters reported that the board was meeting late on Wednesday, US time, but as of 03:15 UTC on 12 November Nvidia had announced no decision, and Huang remained chief executive.
The Times report adds a second relationship to the scandal that began with Alice Huang, the Megaspeed executive whom US intelligence reportedly believes was working for China. The paper said Huang’s relationship with the executive was described by five current or former employees. Some employees also described a video, taken at a San Jose hotel during Nvidia’s conference in March, that the Times said showed the pair being affectionate. The Times said it had not seen the video itself, and neither Nvidia, Huang nor the executive has confirmed the account.
What the second relationship report says, and why it matters to the board
A relationship with a direct report is a different kind of problem for a board than an affair outside the company. Many large companies require senior staff to disclose relationships with people they manage, because of the risk of conflicts and favouritism. According to the Times, Huang told its reporters, “I don’t think you should be talking to me directly,” before ending the call. TalkEsport is not naming the executive, who has not commented publicly and has not been accused of any wrongdoing.
The report also strains the board’s earlier support for Huang. When it opened its investigation on 8 November, the board said in a statement that it “has confidence in Jensen and his leadership team”. Two days later, its independent members hired Joon H. Kim, a former acting US Attorney, and the law firm Wachtell, Lipton, Rosen & Katz to run that inquiry, as we reported in our story on the hiring. Huang had returned to the office this week and apologised to executives for the affair he admitted on Sunday.
How Nvidia shares and Washington reacted to the ouster report
Investors reacted within minutes, and Nvidia shares fell more than 8% in extended trading on Wednesday, according to Reuters. Rivals moved the other way, with AMD up about 4% and Broadcom up about 3% after hours. The fall adds to the roughly $452 billion of market value that Nvidia lost in the first two sessions after Huang’s letter, which we charted in our analysis of the sell-off. Regular trading resumes on the Nasdaq at 14:30 UTC (09:30 ET) on Thursday.
Not everyone wants Huang gone, and some prominent voices in finance have spoken up for him. The Kobeissi Letter, a widely followed markets newsletter, told the board in a post on X that there is “no clear replacement” for him. Venture investor Ron Conway had called for patience while the investigations ran their course, shortly before the Times story was published. Semafor reported that some directors favour naming chief financial officer Colette Kress as interim chief executive, and Bloomberg said the board is working with an outside firm to identify replacements. Kress has been Nvidia’s finance chief since 2013, after senior finance roles at Cisco and Microsoft, and Nvidia has not commented on either report.
Washington is also turning up the pressure on Huang this week. Representative John Moolenaar, who chairs the House Select Committee on the CCP, said Huang will likely be subpoenaed if he does not agree to a closed-door briefing, according to Fox Business. The Justice Department has reportedly taken over the federal investigation into Megaspeed, the Singapore company where Alice Huang was an executive. A separate report this week linked her to a Shanghai firm that moved $7.5 billion of Nvidia chips into China, and no charges have been reported against her.
Huang has led Nvidia since he co-founded it with Chris Malachowsky and Curtis Priem in 1993. The company is due to report its third-quarter results on 17 November, and Huang has been asked to brief three House committees on 18 November. Our Megaspeed explainer sets out how the scandal began.
