Nvidia’s board is preparing to oust co-founder and CEO Jensen Huang, The Wall Street Journal reported Wednesday, as the Santa Clara, California chipmaker confronts investigations and reports of two extramarital affairs.
Directors could meet as soon as Wednesday to determine Huang’s future, the Journal reported, citing people familiar with the matter.
A departure would end more than three decades of leadership by Huang, who has run Nvidia since its founding in 1993 and helped transform a maker of computer graphics chips into a central player in the artificial intelligence boom.
Nvidia shares fell about 8% in after-hours trading Wednesday, Reuters reported.
Earlier Wednesday, The New York Times reported that Huang had an extramarital relationship with Kimberly Powell, Nvidia’s vice president of health care, who reported to him. The Times cited five people who had worked at the company.
Nvidia and Powell did not immediately respond to Reuters’ requests for comment, nor to a request for comment from the Bay Area News Group.
The revelations follow scrutiny of Huang’s relationship with Alice Huang, an executive associated with Singapore-based Megaspeed whom U.S. intelligence officials suspect of spying for China, according to previous Times reporting. Megaspeed has faced investigation over suspicions that it helped route advanced Nvidia chips to China despite U.S. export restrictions.
In a letter to employees Sunday, Jensen Huang apologized for infidelity and pledged to cooperate with an independent investigation. His letter did not identify his partner.
“I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did,” Huang wrote.
Nvidia’s board announced its investigation the same day, saying independent directors and outside lawyers would examine reports that Huang had been targeted by a foreign intelligence operation. At the time, directors expressed confidence in Huang and his leadership team and said they had no reason to believe national security or Nvidia’s secrets had been compromised.
On Tuesday, the independent directors said they had retained former acting U.S. Attorney Joon H. Kim and the law firm Wachtell, Lipton, Rosen & Katz to conduct the investigation.
In a separate report Wednesday by technology trade publication CRN, an Nvidia spokesperson said: “Jensen is committed to continuing to lead Nvidia as CEO without interruption.”
The controversy has also brought a shareholder lawsuit. Investor Mark Kistenmacher sued Nvidia and Huang in federal court Monday, alleging that misleading statements about Huang’s relationship with Alice Huang and Nvidia’s dealings with Megaspeed inflated the company’s share price before subsequent revelations caused investors losses. He is seeking class action status.
The leadership crisis comes as Nvidia’s business has expanded rapidly. The company reported $96.2 billion in revenue for the quarter ended July 26, more than double its revenue a year earlier. Its data center business accounted for $89 billion of that total.
