Nvidia’s board of directors is preparing for the possible removal of co-founder and chief executive Jensen Huang, the Wall Street Journal reported. According to Reuters sources, the board may meet to decide the future of the 63-year-old executive.
The decision comes days after Nvidia launched an independent investigation into reports that Huang had been the target of a foreign intelligence operation. The company announced the probe on November 8, after Huang admitted that he had been unfaithful to his wife.
In its official statement, the board said: “The board has confidence in Jensen and his leadership team.” At the same time, the directors said they would review all available information because they consider the national and economic security of the United States among their top priorities. Nvidia added that it had no reason to believe that national security or company secrets had been compromised.
The investigation and new allegations
U.S. intelligence agencies have linked Huang to Chinese businesswoman Alice Huang, who, according to reports, is suspected of having ties to Chinese intelligence. She is not related to the head of Nvidia. Huang has admitted to the personal relationship but has not named the woman.
The New York Times also reported on an alleged relationship between Huang and a female Nvidia executive who reported to him. These allegations are among the reasons the board is discussing his future, but there is currently no public confirmation that the investigation has established a violation of the law or the disclosure of confidential information.
The Associated Press reported that, in the event of his removal, the names being considered as successors include co-founder Chris Malachowsky and chief financial officer Colette Kress. However, no decision on a specific replacement has been announced.
Market reaction
Nvidia shares fell by more than 8% in after-hours trading following reports of Huang’s impending removal. According to CBS News, the decline continued the sharp drop in the stock’s value since the investigation began, while the company’s market capitalization fell by more than $450 billion.
Huang has led Nvidia since its founding in 1993. Under his leadership, the company transformed from a graphics chip maker into a major supplier of processors for artificial intelligence systems. His potential replacement would create a leadership change at a company whose strategy and public image are closely tied to its co-founder.
At present, it has only been confirmed that Nvidia is conducting an independent investigation and that the board is discussing Huang’s future. There has been no official announcement that he has been removed or resigned.
Sources: investing.com, cbsnews.com, apnews.com