New York
In a matter of days, a corporate scandal has toppled the leader of the world’s second-most valuable company, Nvidia CEO Jensen Huang; thrust his family into the spotlight; raised huge questions about the future of the AI industry; and landed on Washington’s doorstep.
Huang resigned from Nvidia on Thursday morning in the wake of mounting scrutiny following reports of multiple extramarital relationships, including one with Alice Huang, a Chinese businesswoman and former executive at Nvidia customer Megaspeed whom US officials had been investigating as a potential national security risk.
Nvidia’s board named longtime CFO Colette Kress as interim CEO. Investors and Wall Street analysts are likely to have big questions for her when Nvidia reports its third-quarter earnings on Tuesday.
In the meantime, Jensen Huang and some key members of the Trump administration are facing questions from lawmakers about the sales and transfer of Nvidia chips to China.
Huang has been called to testify in a closed-door congressional hearing on December 1; lawmakers have said they will subpoena him if he doesn’t voluntarily agree to testify. Commerce Secretary Howard Lutnick has agreed to testify next month before the Senate Banking Committee, which has also requested to hear from Huang.
Huang’s resignation represents a rapid and stunning fall from grace for one of the most powerful men in tech. Huang had run and largely been synonymous with Nvidia in the 33 years since he cofounded it in a Denny’s restaurant in 1993.
His Thursday exit was a marked reversal from just days earlier. On Sunday, the Nvidia board said it would investigate whether Huang was the target of a foreign intelligence effort, but expressed confidence in his leadership and said it did not believe company secrets or national security had been compromised. The same day, Huang admitted to an extramarital affair, but did not name the other party.
But in the subsequent days, growing national security concerns on Capitol Hill — as well as reports that Huang had at least one additional extramarital relationship — appeared to force the board’s hand.
It convened Wednesday night to weigh Huang’s future, and he was out the next morning.
Nvidia’s stock (NVDA) has taken a beating amid the scandal. As of Friday’s close, Nvidia’s shares had fallen 12.75% since the start of the week, erasing roughly $573 billion in market value.
That has wider implications beyond just the company and its investors.
Nvidia is one of the largest stocks in the S&P 500 — it comprises about 6% of the total value of the index — meaning its decline has broad implications for many people’s investment and retirement accounts.