Pressure Mounts on Nvidia's Jensen Huang Amid Reports of Second Affair

The board was planning to meet as soon as Wednesday to determine Huang's future, according to people familiar with the matter cited by the Journal. It was not immediately clear who would succeed him, the paper said.

The New York Times reported on Wednesday that Huang had an extramarital relationship with Kimberly Powell, Nvidia's vice president of health care, who reports to him, citing five people who worked at the company. The Journal also reported the relationship, citing a person familiar with the matter.

Nvidia's code of conduct tells employees to avoid situations that create conflicts, including personal relationships, according to the Times. When the newspaper reached him by phone, Huang said, "I don't think you should be talking to me directly," before hanging up.

Second Affair

It is the second affair involving Huang to come to light. The New York Times reported in October that U.S. officials had concluded Alice Huang, an executive at Singapore-based Nvidia customer Megaspeed, was a Chinese intelligence asset who had developed a close relationship with Jensen Huang. The Financial Times reported last week that a U.S. government memo said the two had been romantically involved. China has denied the allegations.

Stock Impact

Nvidia shares were down 5.9% at $163.43 in premarket trading early on Thursday, according to Yahoo! Finance data, after closing up 2.9% at $173.73 on Wednesday, before the reports emerged. The stock had already lost about $430 billion in market value on Monday and Tuesday.

Traders expect further losses. On Decrypt Predict, users put an 89% chance on Nvidia trading at or below $160 during regular market hours at some point in November, according to the market. By contrast, they gave just a 6% chance that the stock would climb back to $216 this month.

Succession Questions

Huang co-founded Nvidia in 1993 and is its largest shareholder, owning about 3.6% of the company. He has said he does not believe in succession planning, according to the Journal, and the company's latest proxy statement warns that it is "highly dependent" on its longstanding executive team, raising questions over who could replace him.

Potential successors are reportedly under discussion already. One person inside the company told the Financial Times that the simplest option would be to appoint chief financial officer Colette Kress as interim CEO, while two sources pointed to Ian Buck, who runs Nvidia's data center business. Analysts cited Arm CEO Rene Haas, a former Nvidia executive, as a possible outside candidate.

Elon Musk said it "would be an honor" to hire Huang. "We always knew key man risk was an issue for Nvidia," Bernstein analyst Stacy Rasgon told the paper.