Nvidia’s Board reportedly preparing to oust CEO Jensen Huang as second extra-marital affair emerges

Nvidia's Board of Directors is preparing to oust co-founder and chief executive Jensen Huang following revelations of two extramarital affairs, including one with a woman suspected of working for Chinese intelligence and another with an Nvidia executive, reports The Wall Street Journal. Although no final decision has been made yet, the company's directors could meet as early as November 11 to discuss Huang's future. Whoever succeeds Huang will be the company's second CEO in 33 years. Nvidia's stock dropped 8% in after-hours trading following the reports. Nvidia's board of directors launched an independent investigation into the matter on November 8.

The report from the WSJ comes hours after the New York Times revealed that Huang allegedly had an extramarital relationship with Kimberly Powell, Nvidia's vice president of health care, who reports directly to him. According to five people who worked at Nvidia, the relationship was known internally, while Huang and Powell were reportedly seen together at a San Jose hotel during Nvidia's GTC conference in March. The allegations follow an earlier report that Huang had a relationship with Alice Huang, a Chinese businesswoman whom U.S. intelligence believes to be a Chinese intelligence asset.

A similar controversy cost Intel chief executive Brian Krzanich his position in June 2018, when an internal investigation confirmed that he had maintained a consensual relationship with an employee, which violated the company's non-fraternization policy applicable to all managers. It is noteworthy that Nvidia's code of conduct explicitly identifies personal relationships as potential conflicts of interest and instructs employees to consult the company's legal department when such conflicts arise. Whether Huang violated Nvidia's internal policies remains unclear, as the code of conduct does not explicitly prohibit all relationships between managers and subordinates.

Huang's potential departure would mark the first CEO transition in Nvidia's 33-year history, and therefore his succession has become an immediate concern for Nvidia, which does not have anyone of Huang's caliber in the leadership team. Although chief financial officer Colette Kress could potentially serve as interim chief executive if Huang is ousted while the BoD searches for a permanent replacement, it remains to be seen how Wall Street would react to this assignment.

Nvidia co-founder Chris Malachowsky, who used to be the company's senior vice president of engineering and operations and remains a member of the company's board and an Nvidia Fellow, could also play a role in the succession process, given his extensive knowledge of Nvidia's technology, corporate culture, and history. However, has not served in an executive role at Nvidia for at least a decade, so the chances that he will succeed Huang are low.

Back on Sunday, directors expressed confidence in Jensen Huang and his leadership team, a choice of words that did not exactly guarantee his continued tenure.

Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.