A prediction has been made that NVIDIA CEO Jensen Huang, who admitted to having an affair with a female businesswoman suspected of being a spy for China's intelligence agency, has a '50 to 50' chance of remaining in office.
Jeffrey Sonnenfeld, a professor (senior vice dean) at the Graduate School of Business who runs the 'CEO Leadership Institute' at Yale University, said that CEO Hwang's chances of recovering his career were "about 50-50," TechCrunch, an American information technology (IT) media outlet, reported on the 9th (local time).
Professor Sonnenfeld assessed that CEO Hwang has received absolute respect and trust throughout the technology industry, but that this incident was a particularly inappropriate decision.
He pointed out, “Even if CEO Hwang was simply naively deceived, any other Nvidia employee would have been fired for this,” adding, “This is an irreparable loss of trust.”
Since founding Nvidia in 1993, CEO Hwang has steadily proven his capabilities and built up what social psychologists call “idiosyncrasy credits,” but he explained that people’s goodwill can run out if mistakes are seen as selfish or violate the group’s core norms.
However, this incident affected various groups, including Nvidia's board of directors, 42,000 employees who must comply with security regulations, and the U.S. government, which controls the export of Nvidia chips.
The problem is that there is no internal succession program or succession line to replace CEO Hwang if he steps down.
This is because NVIDIA has maintained an extremely horizontal structure, with approximately 60 executives reporting directly to the CEO.
Professor Sonnenfeld said that for this reason, a board of directors in crisis could find a 'savior-like solution' from outside, and suggested former Google CEO Eric Schmidt as an idea.
At the same time, he predicted that even if CEO Hwang retains his title, some of his daily decision-making authority will have to be handed over to someone else.
In particular, unlike other technology companies, NVIDIA did not grant CEO Hwang differential voting shares, so he does not have much recourse if the board of directors decides to fire him.
According to NVIDIA's disclosure in May, CEO Hwang held 871 million shares as of March 23, accounting for a stake of only 3.58%.
Previously, CEO Huang admitted to having an affair with Alice Huang (Chinese name: Huang Le), a former Singaporean data center company executive who was identified as a spy for China's intelligence agency, the Ministry of State Security (MSS).
NVIDIA's board of directors formed an independent committee and began an investigation into allegations that the company was targeted by a foreign intelligence agency.
TechCrunch is concerned that CEO Hwang's crisis in dominance could spread into a crisis in the overall AI industry, as NVIDIA not only virtually monopolizes the global AI semiconductor market, but has also acted as a huge 'central bank' in the AI ecosystem, investing in major companies such as OpenAI and Antropic and leading financial loan guarantees.
