Update: Nvidia CEO Jensen Huang to step down
The man who built Nvidia is leaving after a second affair was reported
Update
Nvidia CEO Jensen Huang has announced he is to quit his role, with CFO Colette Kress taking over as interim chief executive while a successor is sought.
According to Reuters, former Synopsys CEO and board member Harvey Jones is joining the company as board chairman.
Nvidia shares fell more than 10% in premarket trading.
The earlier story continues below:
Nvidia CEO Jensen Huang had a relationship with the company's married VP of health care, sources have told the New York Times.
Sources have told the NYT that Huang conducted the affair with Kimberley Powell, who leads programmes that could apply Nvidia's chip tech to higher education and health care.
This set of allegations, coming in the same week that Huang admitted having had a relationship with an alleged Chinese intelligence asset – for which he is under internal investigation – have moved the board to meet today to discuss his potential removal.
Five people who worked at Nvidia told the NYT about the relationship. Two current employees said Huang, 63, and Powell, 48, were seen "being affectionate" together at the company's GTC conference in San Jose in March.
A bystander who apparently captured footage of Huang and Powell together was subsequently "sequestered" by Huang's security detail and asked to sign an NDA, sources said.
Both Huang and Powell are married to other people.
Nvidia's code of conduct raises conflict-of-interest questions
Like many companies, Nvidia has a code of conduct warning against personal relationships that may create conflicts of interest.
That same document begins with a letter from Huang himself, acknowledging the importance of creating a "safe and inclusive environment" and recognising the company's responsibility to "maintain high ethical standards."
Those words ring hollow in light of the new allegations: Powell reports directly to Huang, and has spent 18 years rising through Nvidia's ranks.
Powell joined the company in 2008 and worked in the HE/health care division for the next eight years. In 2016 she was promoted to senior director of artificial intelligence business development, and in late 2017 to her current position as Nvidia's VP of health care.
Powell regularly speaks at tech conferences around the world, although the accusations appear to already have affected her schedule: she has pulled out of her participation on the opening panel at the Milken Institute's Future of Health Summit in Washington DC, which is scheduled to begin today.
Jensen already under investigation over Alice Huang affair
Jensen Huang is already under internal investigation for an affair he admitted to conducting with Alice Huang, a former executive of a Singapore-based company called Megaspeed that was an Nvidia customer.
Megaspeed's business model is to buy chips and rent them out to Chinese cloud companies like Alibaba. It has bought billions of dollars’ worth of Nvidia chips in the last two years.
However, the company has come under US scrutiny for allegedly smuggling advanced Nvidia chips into China, which would violate US export controls.
How have the allegations affected Nvidia's share price?
Jensen Huang co-founded Nvidia in 1993 and has led it to become one of the world's most successful companies, but he is now starting to look like a liability.
Shares in Nvidia were already down about 4.3% at the close (although almost 9% in day trading) on Monday, after Huang admitted conducting the first affair. They have now fallen a further 6.5%, following the new allegations and reports that the board is considering removing Huang as CEO.
Since last Friday, that means Huang's own actions have lost his company 12.99% of its stock value – equivalent to $584.4 billion in market capitalisation. Little surprise that the board is in talks about his future.
Computing says:
An Nvidia without Huang could look very different, and not just because the new CEO would lack his signature leather jackets. Names being bandied around include current CFO Colette Kress and Arm CEO Rene Haas, but whoever takes the reins will have a challenge on their hands. Despite - or because of - Nvidia's status as one of the most profitable companies in the world, its share price is sure to take a hit if Huang is ousted.
On top of that, AI is looking less like a bubble ready to pop and more like a slowly deflating balloon; investor confidence is waning, and that will also affect Nvidia's bottom line.
Of course, Huang could fall on his sword and leave on his own terms, but whether he jumps or is pushed he will probably go straight to a competitor, which would gain a formidable – if slightly tarnished – tech celebrity.
Finally, the board could choose to keep Huang on – in which case little or nothing changes.