Jensen Huang was a busted flush at Nvidia – he had to go | Nils Pratley

The resignation of Jensen Huang, the co-founder and chief executive of Nvidia, has triggered a sharp drop in the company’s share price. Investors had previously hailed him as an 'irreplaceable' figure in the tech world, but the board decided the risks to the business were too great.

Huang’s departure follows a confession of infidelity with Alice Huang, the boss of a Singapore-based firm suspected of smuggling Nvidia chips into China. This relationship created a direct conflict of interest and raised serious concerns about national security and export compliance.

Reports of a second affair with a senior Nvidia employee further complicated the situation. The company’s directors concluded that the best course of action was to 'rip off the Band-Aid and take Nvidia into its next chapter'.

The decision was driven by three main factors. First, congressional investigations into the sale of Nvidia’s advanced AI chips to China are already underway. Second, Huang’s personal lobbying clout on export policy had evaporated, and third, the company’s board had long been criticized for over-reliance on a single individual.

Colette Kress, the chief financial officer, has been named interim chief executive. She is well-regarded on Wall Street, and the company will likely attract strong candidates for the permanent role.

To address governance concerns, the board has appointed Harvey Jones, a former chief executive at Synopsys, as the new independent chair. This move is intended to create proper checks and balances within the company.

The share price initially fell by 13% but narrowed to a 5% decline within hours. Investors have been reminded that Nvidia still possesses the world’s most in-demand graphics processing units and that many pioneering companies have prospered after the exit of an 'irreplaceable' chief executive.