NVIDIA Board Launches Investigation; Jensen Huang May Stay but With Limited Powers

According to Fortune, NVIDIA CEO Jensen Huang has admitted to an extramarital affair with Alice Huang, a former Megaspeed executive suspected of being a Chinese spy. NVIDIA's board launched an independent investigation on Sunday and said the same day that it has confidence in Huang. NVIDIA shares fell as much as 8.8% on Monday and closed down about 4.3%, wiping out approximately $190 billion in market value. Jason Schloetzer, associate professor at Georgetown University, told Fortune that the board is not expected to make a 'stay or leave' decision; it is more likely to be 'stay with reduced powers,' namely appointing a clear number two, communicating succession plans more publicly, and adjusting board seats to show stronger oversight.

Santa Clara University associate professor Jo-Ellen Pozner noted that NVIDIA's management structure is unusually flat, with Huang having dozens of direct reports, a structure that suppresses the emergence of potential successors. Of NVIDIA's 11 directors, three, including Huang, have served continuously since the company's founding in 1993, and one other joined in 1997. Pozner described the board as a 'captive board,' questioning whether it is willing to hold Huang accountable.

Senators Elizabeth Warren and Jim Banks issued a joint statement on Monday asking NVIDIA to respond and tighten restrictions on exports of advanced AI chips to China. NVIDIA and Huang also face a proposed shareholder class-action lawsuit alleging they misled investors about Huang's relationship with Alice Huang. Trump said the FBI is investigating the nature of the relationship. An NVIDIA spokesperson told Axios that Huang is committed to continuing as CEO without interruption. Polymarket traders put the probability of Huang resigning or being removed by the end of the year at 16%.

Source: TechFlow