Nvidia board meeting to decide CEO Jensen Huang’s fate stretches into evening

Nvidia's board of directors is currently in a meeting to determine the future of CEO Jensen Huang, as confirmed by CNBC late on Wednesday. This comes on the heels of reports detailing two alleged extramarital relationships involving Huang—one with an employee and another with an individual suspected of being a Chinese spy.

Following the initial report from The Wall Street Journal indicating that the board might force Huang out, Nvidia's stock experienced a significant decline, falling over 9% in after-hours trading. This news broke shortly after The New York Times revealed that Huang had an affair with Kimberly Powell, who serves as Nvidia's vice president of healthcare.

According to her biography on Nvidia's official website, Powell oversees the company's global healthcare initiatives, which include hardware and software platforms designed for accelerated computing, artificial intelligence, and visualization, all aimed at enhancing medical imaging, life sciences, drug discovery, and healthcare analytics.

The New York Times also reported that Huang and Powell were seen displaying affection toward each other at a hotel in San Jose, California, back in March. Neither Nvidia nor Powell has commented on the situation, and Heller, the public relations firm Huang reportedly engaged as early as last year, has not responded to inquiries from CNBC.

This development follows Huang's recent admission of an affair with a woman believed by U.S. intelligence to be linked to Chinese espionage. According to The Financial Times, Huang was involved with Alice Huang, who is suspected of being a spy for China's Ministry of State Security, as reported by The New York Times.

In light of these allegations, Nvidia's board has initiated an independent investigation and enlisted the law firm Wachtell, Lipton, Rosen & Katz to examine the situation regarding the espionage claims. In a message to Nvidia employees on Sunday, Huang expressed remorse for his actions, stating, "I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry."

Huang's ownership of Nvidia shares is largely shared with his wife, Lori Huang, and these shares are held in trusts, totaling approximately 800 million shares. Huang personally holds around 70 million shares, which limits his economic control over the company.

Rumors regarding Huang's relationship with Powell have circulated for several years, partially due to Powell's lack of a background in health or science, as noted by a former employee who requested anonymity due to the sensitive nature of the issue. Nvidia's healthcare division, while important, is a smaller segment of the company, which primarily generates revenue from its advanced AI systems and graphics processing units (GPUs).

In recent public appearances, including at Nvidia's annual GTC conference, Powell has discussed how the company's AI technology can enhance drug discovery, support healthcare providers, and improve clinical efficiency. She has been leading Nvidia's healthcare initiatives since 2017.

Prior to the after-hours stock drop on Wednesday, Nvidia's shares had already decreased by 7% earlier in the week, marking its sixth consecutive week of losses. This decline reflects broader concerns regarding the sustainability of the artificial intelligence sector, particularly after the recent midterm elections, which saw Democrats gain significant control in Congress and pass numerous ballot measures that may complicate the construction of data centers.

Huang is a prominent figure in the AI industry, often referred to simply as "Jensen" by clients and competitors alike. Nvidia has been a major player in the AI boom, with its chips being essential for training models and managing extensive AI workloads.