Nvidia CEO Jensen Huang has resigned as the company faces a leadership transition, allegations involving his personal relationships and questions from US lawmakers about national security. CFO Colette Kress was named interim CEO on Thursday, while Nvidia's market value fell by about $550 billion over five trading days. The episode has put the AI chipmaker's succession planning, corporate governance and information security under scrutiny.
Kress takes over as interim CEO
Huang had been Nvidia's public face since 1993 and helped lead its rise into one of the world's most valuable companies. Nvidia is now searching for a permanent successor. Company executives held an emergency meeting to discuss next steps. Nvidia has declined to comment several times since Wednesday, and a representative for Huang did not respond on Thursday.
Reports have raised questions about Huang's personal relationships. He acknowledged on Sunday that he had been “unfaithful” to his wife. Earlier reports alleged a relationship with Alice Huang, who is not related to Jensen Huang. Alice Huang previously held an executive role at Singapore-based Megaspeed and has been suspected of links to Chinese intelligence. China has denied the allegations. US Attorney General Todd Blanche said on Thursday that the Justice Department had not reached a conclusion on whether Alice Huang spied for Beijing.
A separate report on Wednesday alleged that Huang had a relationship with Nvidia executive Kimberly Powell. Powell is a longtime employee who reported directly to Huang. Nvidia employees had noticed the pair's close relationship, but the company has not publicly confirmed details of the allegations.
Lawmakers seek answers on espionage allegations
US Senators Elizabeth Warren and Chris Coons, along with several Democratic members of the House Foreign Affairs Committee, have publicly called on Huang to brief Congress. The committee could issue a subpoena if he does not agree to appear voluntarily.
Nvidia has said it has no reason to believe national security or company secrets were compromised and has pledged that an independent investigation will review all available information. The company has opened an inquiry to determine whether Huang was ever targeted by a foreign intelligence operation. No findings have been announced, and there is currently no evidence that Nvidia's confidential information was leaked.
The concerns extend beyond the change at the top. Nvidia's chips provide core computing power for training and running large AI models and chatbots, putting the company's leadership stability and information security on the radar of lawmakers. Huang had also become a prominent public advocate for the AI industry as Nvidia's business expanded.
Nvidia loses $550bn in market value over five sessions
Nvidia's market value fell by $550 billion in five trading days, the largest five-day decline in the company's 27 years as a publicly traded business. Its valuation had grown by more than 470% over the past five years and reached a high just weeks ago. The stock is now 31% below that peak. Broader uncertainty across the technology sector is also part of the market backdrop, so the share-price decline cannot be attributed entirely to the personal allegations and governance concerns.
The drop may also affect everyday investors. Nvidia accounts for about 7% of the S&P 500, an index widely represented in funds held in US retirement accounts. A fall in Nvidia shares can therefore weigh on those funds and account balances. Many Nvidia employees had also received compensation worth millions of dollars by selling shares after the stock's sharp rise. Employee reaction to the latest developments grew markedly stronger after a second allegation involving a company executive became public.