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Nvidia board weighs Jensen Huang's future
Nvidia did not immediately respond to a request for comment on the board meeting. The Wall Street Journal first reported that the company was preparing to remove Huang.
Huang, 63, has no obvious successor and owns about 3.6% of Nvidia's stock. He has dozens of direct reports, reflecting his tight control over the leading supplier of AI chips.
Gil Luria, head of technology research at D.A. Davidson, said: "Huang being removed immediately could be challenging for Nvidia since it does not have a succession plan in place … If Mr. Huang broke the law or violated company policies, the board is likely to act as soon as they have proof."
Including Wednesday's after-hours decline, Nvidia has lost about $600 billion in market value this week since its board announced an investigation into Huang's relationship with a Chinese businesswoman.
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Report alleges affair with Nvidia executive
The New York Times reported on Wednesday that Huang had also had an extramarital affair with Kimberly Powell, Nvidia's vice-president of healthcare, who reported to him. The newspaper cited five people who had worked at the company.
Asked by phone about the relationship, Huang said, "I don't think you should be talking to me directly," before hanging up, according to the newspaper. Nvidia and Powell did not immediately respond to requests for comment. Reuters could not immediately verify the report.
The controversy began with reports about Huang's relationship with Alice Huang, whom US intelligence has said was involved in facilitating shipments of Nvidia chips to Chinese companies.
In a memo to employees on Sunday, Huang acknowledged being unfaithful to his wife and took "full responsibility", but did not provide details. Nvidia's board launched an investigation the same day into whether he had been targeted by a foreign intelligence operation. Independent directors are overseeing the inquiry with outside legal counsel.
Leadership uncertainty hits shares
Nasdaq futures fell 1%, while shares of rival chipmakers AMD and Broadcom gained 4% and 3%, respectively, in after-hours trading. Investors and analysts said demand for Nvidia's chips was unlikely to decline in the near term.
Nick Ferres, chief investment officer at Vantage Point Asset Management, said: "Nvidia is also at the centre of the circular financing which is providing capital to the investment boom. They are financing their customers. In these types of booms or bubbles, sometimes all it takes is a slowdown to shift it into the bust phase."
US lawmakers seek briefing
House Foreign Affairs Committee Chairman Brian Mast and two other senior Republican lawmakers had asked Huang to provide a closed-door briefing about allegations that the Chinese businesswoman passed information to Beijing.
Mast is open to issuing a congressional subpoena if Huang does not respond, his spokesperson said. House China Committee Chairman John Moolenaar said Huang had until 5 pm ET on Wednesday to agree to a meeting or propose another date.
"If he doesn't agree to that or submit an additional date, I believe there will likely be subpoenas for him to appear," Moolenaar said.
The allegations have also increased scrutiny of US controls intended to restrict China's access to Nvidia's advanced chips. Huang co-founded Nvidia in 1993 with Curtis Priem and Chris Malachowsky, initially making graphics chips before expanding into general computing and artificial intelligence.
