Huang's Reported Third Affair Widens Nvidia's Crisis

Jensen Huang, Nvidia's former chief executive, had an intimate relationship with another Nvidia employee, Reuters reported Thursday in an exclusive. The account, based on two people familiar with the matter, emerged after Nvidia’s board accepted his resignation. Directors are searching for a permanent successor while an independent investigation examines whether Huang was targeted by a foreign intelligence operation.

The unconfirmed relationship

The employee’s identity and role, when the relationship took place and whether it is ongoing are unknown, and Huang has not confirmed the account.

Earlier accounts involved Alice Huang, a former Megaspeed executive suspected by U.S. intelligence of being a Chinese spy, and Kimberly Powell, Nvidia’s vice president of health care, who reported directly to him.

Huang acknowledged an affair in a Nov. 8 statement but named nobody. He has not confirmed the Powell report either.

Nvidia declined to comment on the latest report. Huang, Powell and a representative for the board did not reply to requests for comment. Attempts to reach the unnamed employee were unsuccessful.

The board’s response

The board opened its investigation earlier this month, assigning independent directors and outside counsel to examine whether Huang had been targeted by foreign intelligence. At the time, directors expressed “confidence in Jensen and his leadership team.”

Nvidia said it has “no reason to believe that either national security or Nvidia secrets were compromised” and pledged that its independent inquiry would look at all available information.

The board accepted Huang’s resignation Wednesday, a regulatory filing showed, and Nvidia announced his departure Thursday morning. The announcement did not address either relationship.

Finance chief Colette Kress is serving as interim CEO and retaining her finance responsibilities. Director Harvey C. Jones became board chair. The search for a permanent chief executive will consider candidates from inside and outside Nvidia.

Jeffrey Sonnenfeld, senior associate dean for leadership studies at Yale School of Management, said Huang had become a “monarch” inseparable from Nvidia.

“They're smitten by the CEO; kind of idolatry,” he said of corporate boards in general.

Investors reassess

By Thursday, Nvidia shares had lost more than 30% of their value from their early October peak.

Bernstein analyst Stacy Rasgon cut his Nvidia price target to $200 from $400 and lowered his rating to Market Perform in a Thursday note. He wrote that there “will no doubt be more allegations to come” and added: “there is a trope that says if you find two ants in your kitchen the best estimate of the total number of ants in your kitchen is not two...”

Rasgon also described Kress’s appointment as positive for the company, while expressing concern about a new chief executive’s ability to manage Nvidia’s product pipeline and customer relationships.

Congressional demands

Huang has agreed to testify before Congress before Thanksgiving, House Foreign Affairs Committee Chairman Brian Mast told reporters Thursday. Huang responded after Mast and fellow committee chairs John Moolenaar and Rick Crawford threatened a subpoena. The testimony is expected behind closed doors; Mast said it will likely be under oath, transcribed and on video.

Sen. Tim Scott, the South Carolina Republican who chairs the Senate Banking Committee, separately invited Huang to testify at a public hearing on Dec. 3.

Huang has hired the law firm Paul Weiss. What services the firm will provide was not immediately clear.

Nvidia is scheduled to report quarterly earnings Tuesday, Nov. 17.

Breaking News: Jensen Huang's Resignation Sends Nvidia Shares Tumbling

Jensen Huang, Nvidia’s co-founder and chief executive since 1993, resigned Thursday, Nov. 12, leaving his posts as president, CEO and director effective immediately, the board said. Nvidia shares drop

The Implicator

New Affair Report Pushes Nvidia Board Toward Ousting Huang

When The New York Times reached Jensen Huang by phone Wednesday and asked about a reported relationship, he said, “I don’t think you should be talking to me directly.” He then hung up. In March, at a

The Implicator

Huang's Fall Rattles Nvidia and the AI Trade

During her first week at Nvidia in 2013, Colette Kress asked Jensen Huang how long he thought he would want her as his finance chief. Huang recalled his answer on a podcast this year: “For as long as

The Implicator

Marcus Schuler

San Francisco

Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: editor@implicator.ai