Nvidia Board Weighs Jensen Huang’s Future After New Report

Directors met late Wednesday after a second report about the CEO’s personal conduct, with no decision announced, no clear successor and a crucial earnings report days away.

Nvidia’s board of directors met late on Wednesday, November 11, to decide whether to remove co-founder and chief executive Jensen Huang, after a new report said he had a second extramarital relationship, this time with a senior executive who reports to him. As of the latest information, Nvidia has announced no decision, and Huang remains chief executive. The allegation about the second relationship has not been confirmed by Huang, the executive or the company.

The New Report

The report, published on Wednesday, said Huang, 63, had a relationship with Kimberly Powell, 48, Nvidia’s vice president of healthcare. It cited five current and former employees and said both are married to other people. According to two of the sources, Huang and Powell were seen being affectionate at a hotel in San Jose, California, during Nvidia’s GTC developer conference in March. The report said its authors were aware of video footage of the incident but had not seen it.

Powell joined Nvidia in 2008, was named senior director of AI business development in 2016 and became vice president of healthcare at the end of 2017. She is one of about 60 executives who report directly to Huang.

Nvidia declined to comment, and Powell did not respond to a request for comment. When Huang was reached by phone and asked about the relationship, he reportedly said he did not think the reporter should be talking to him directly. The report also noted that many companies, Nvidia included, have rules that discourage relationships between managers and their subordinates.

From Confidence to a Board Meeting

The meeting marks a sharp change from Sunday, when the board publicly said it had confidence in Huang. That statement came after he admitted in a message to staff that he had been unfaithful to his wife, and after the board announced an independent investigation into reports linking him to a woman accused of working for Chinese intelligence. Those espionage claims remain unproven, and China has rejected them. The board said at the time that it had no reason to believe national security or Nvidia’s secrets were compromised.

After the new report, it was reported that the board was preparing to remove Huang, and that directors would meet as soon as Wednesday. People familiar with the matter said the board met late that night. It was also reported that the company has been working with an outside firm to explore possible replacements, including an interim chief executive.

An Unusual Board and No Obvious Successor

The board has 11 directors, including Huang himself, and no board chair, an unusual arrangement. Reports say Nvidia has no obvious successor and that Huang is widely viewed as irreplaceable. The company’s own proxy statement warns that it is highly dependent on its longstanding executive team and that losing members of it could hurt its strategy and performance.

The independent directors have hired the law firm Wachtell, Lipton, Rosen & Katz for the investigation, and reports say a former federal prosecutor is leading the probe.

Market Reaction

Nvidia shares fell about 7 to 9 per cent in after-hours trading on Wednesday, according to different estimates. By one estimate, that put the company’s market value at about $3.85 trillion, roughly $658 billion below its close on November 6, the last trading day before Huang’s admission. Huang is Nvidia’s largest individual shareholder, with a stake of about 3.56 per cent.

Observers are divided on what comes next. Former Securities and Exchange Commission chair Gary Gensler said the new allegation is likely to force the board to oust Huang. Analyst Dan Ives has said Nvidia would be worth 25 to 30 per cent less without him. These are opinions, not facts about the board’s decision.

Washington’s Role

The scandal has a national security dimension that goes beyond a corporate governance dispute. Republican lawmakers have asked Huang to answer questions about the allegations and about Nvidia’s China business, and Representative Brian Mast has said he is prepared to subpoena him. Huang has been asked to brief House committees on November 18.

Timeline

Date	Development
Oct 29	Report of an alleged effort to cultivate Huang by a woman linked to Chinese intelligence
Nov 8	Huang admits infidelity; board opens independent investigation and expresses confidence in him
Nov 9	China calls the espionage claims unsubstantiated and a smear
Nov 11	Report of a second alleged relationship; board reported to be preparing to oust Huang; board meets
Nov 17	Nvidia due to report Q3 results
Nov 18	Huang asked to brief House committees

Precedents

Boards have removed chief executives over relationships with employees before. Intel’s CEO resigned in 2018, and McDonald’s board dismissed its CEO in 2019. Shareholders fared differently afterwards, with Intel trailing the market over the following year and McDonald’s outperforming it.

What to Watch Next

The key questions are whether the board announces a decision, who would lead Nvidia in the interim, and what Huang, Powell or the company say publicly. Nvidia’s third-quarter results on November 17 and the congressional briefing on November 18 are the next fixed dates. Until Nvidia confirms otherwise, the second relationship remains an allegation based on unnamed sources, and the board’s discussions are not a final decision.