Jensen Huang: Spy row, second affair leaves Nvidia without its rockstar CEO

Nvidia's board met late Wednesday to decide on CEO Jensen Huang's future after reports emerged of a second extramarital affair — this time with an employee.

In a statement issued on Thursday morning, the world's most valuable chip supplier said Huang was resigning as president, CEO and board member, effective immediately.

The firm added that current Vice President and Chief Financial Officer (CFO) Colette Kress would become interim CEO.

Under Nvidia's bylaws, Huang can be removed "with or without cause" by a majority vote of its 11 directors.

The New York Times first reported on the latest scandal, alleging that the 63-year-old Huang had an affair a senior Nvidia executive who reported directly to him.

Both are married; Huang tied the knot with his wife Lori in 1985.

The latest revelation emerged just three days after Huang admitted a relationship with a Chinese woman, whom United States intelligence agencies believe was spying for China.

The woman, Alice H., is an executive at Megaspeed, a Singapore-based cloud computing firm that runs artificial intelligence (AI) data centers across Southeast Asia and is a major client of Nvidia.

The US government is investigating the startup on suspicion that it secretly sent some of its Nvidia chips to China, violating Washington's curbs on high-end semiconductors.

Those advanced Nvidia processors are used to train and run the large AI models behind chatbots and other generative AI products.

Megaspeed denies the allegations and on Thursday pledged to cooperate with US investigators. H., the alleged spy, has been barred from entering Singapore and Taiwan — a key chipmaking island.

While Nvidia's board backed its CEO after the first scandal emerged, market watchers believe the second caused too much reputational damage to one of the world's top three companies by market value.

According to The Wall Street Journal, Huang doesn't believe in formal succession planning, so with little notice, Nvidia appointed CFO Kress as interim CEO.

Bloomberg reported Wednesday that Nvidia’s board is working with advisers to identify potential permanent successors.

Kress, other senior Nvidia executives and members of Huang's own family have been mooted as replacements. The family members include his daughter Madison, a senior director of product marketing, and his son Spencer, who currently works in the firm's robotics division.

Rumors also abound over a longer-term solution. On India's CNBC-TV18, Jeffrey Sonnenfeld from the Yale School of Management floated former Apple CEO Tim Cook and ex-Google CEO Eric Schmidt.

The scandals have certainly hit Nvidia's market value. Since the first extramarital affair emerged on Sunday, the chipmaker's market capitalization has fallen by well over $600 billion to $4.2 trillion.

Nvidia shares were down more than 9% in premarket trading Thursday, after dropping by 10% earlier this week. Some analysts expect the stock price to struggle in the short term.

Demand for Nvidia's advanced chips is so high that many market analysts expect little impact on near-term sales.

"While Jensen [Huang] is the heart and lungs of the Nvidia story…the company and its leading-edge GPU technology will go on and [his departure] does not change the entrenched position Nvidia has in the fAI Revolution chip arms race," said Dan Ives, a partner, senior managing director and tech analyst at Yorkville Ives, a US-based merchant bank.

Analysts see the biggest long-term risk in strategy and execution. After all, Huang was the leader who picked which ideas Nvidia should bet heavily on and got the whole company behind them.

His sudden exit is also seen as highly disruptive to the chip designer's strong relationships with AI hyperscalers, Taiwanese chip producer TSMC and foreign governments — especially China.

Huang was Nvidia's main lobbyist on US chip export rules and persuaded US President Donald Trump to ease some curbs on China last year.

Huang is often called a rockstar CEO for his leather jackets instead of suits.

Like Elon Musk of Tesla and SpaceX, he was also seen as a key-person risk as Nvidia’s public image, strategic direction and technical decisions became closely tied to him.

Huang steered the company for more than three decades and was also respected for his hands-on involvement in product architecture and engineering decisions.

He also insisted on a flat management structure, with around 60 executives reporting directly to him.

Huang has run the company so tightly around his own technical judgment and product decisions that investors may have little sense of how it would function without him.

At the same time, Nvidia is no longer the startup Huang founded in 1993. The company has built deep expertise in chip design and software, creating a durable moat that helps protect its huge profits, which topped $120.1 billion last year.

Some analysts argue that its central role in the AI hardware buildout makes it less dependent on Huang’s day-to-day input.

China is quickly playing catch-up with the US in the global race for AI dominance.

While Chinese AI models have lagged behind the likes of ChatGPT and Claude, recent updates from DeepSeek, Alibaba and Moonshot have closed much of the gap on benchmark tests and often beat US rivals on cost and speed.

Beijing is also investing heavily in domestic chips and data centers to reduce reliance on US hardware.

The US has curbed exports to China of Nvidia's most advanced AI chips.

However, this move has only slowed the pace of China's AI ambitions.

Reuters reported Thursday that Chinese AI firms are now trying to rent Nvidia-powered computing capacity at data centers outside China, amid fears the US could further tighten restrictions on advanced chips.

Also Thursday, Beijing accused the US of using the Nvidia spying claims as a pretext to impose a technological "blockade" on China.

The issue is likely to dominate talks next week between Trump and Chinese President Xi Jinping at the APEC gathering in Shenzhen in southern China.