Huang admitted to an affair on Sunday, and on Monday Nvidia’s board opened an investigation. By Wednesday night the question was no longer the investigation. It was the job.
The Wall Street Journal reports that the board is preparing to oust Huang and met to decide his future. What set it off was a New York Times story about a second relationship: Huang had been involved with Kimberly Powell, Nvidia’s vice president of healthcare, who reports directly to him. Powell has been at the company for more than 18 years, and the matter was discussed internally.
Shares in the $4.2 trillion chipmaker dropped 8.6 percent in after-hours trading, and futures tracking the Nasdaq 100 slipped about one percent.
A board that was never built for this
Nvidia’s board has no chair, which says a good deal about Huang’s standing inside the company. This week the directors hired a former federal prosecutor to investigate his affair with Alice Huang, an executive at the Nvidia customer Megaspeed whom US intelligence officials believe was recruited by China’s Ministry of State Security. Until Wednesday the board had backed Huang as chief executive.
Two paths are now open. Huang steps back from his CEO duties while the investigation runs, or the board pushes for an immediate departure. Bloomberg reports that the directors are working with an outside firm to identify candidates and are weighing whether to install a temporary CEO.
In practice that is hard. Nvidia’s annual reports and corporate governance filings contain no reference to succession planning and lay out no process for replacing the chief executive, not even in an emergency.
Donald Trump said on Monday that the FBI was looking into the matter, while backing Huang and calling him “a high-quality person.”
Why this lands in the week Anthropic goes public
Nvidia’s chips train and run the models from Anthropic and OpenAI, and through equity stakes and financial guarantees the company is woven deep into how the AI industry is financed. Nvidia’s own disclosure in Anthropic’s prospectus says it intends to invest roughly $10 billion in Anthropic after the listing. That listing is happening right now, the books are multiple times oversubscribed, and the price is not yet set.
A leadership change at Nvidia would not immediately void a single commitment. It would, though, put a question mark on the part of AI financing that rests on promises from one company rather than on revenue, and that company has so far been steered by one man. If you are subscribing to Anthropic shares this week, read that line in the prospectus twice.