Shares of Nvidia dropped almost 9% in after-hours trading amid multiple reports that the company’s board would meet Wednesday night to discuss CEO Jensen Huang’s future after The New York Times reported that he had a relationship with an executive who reported to him.
Nvidia’s board is addressing Jensen Huang’s future at the company, a source familiar with the matter told NBC News.
“I don’t know what the board is going to do,” the source said.
The New York Times reported, citing five people who worked at Nvidia, that Huang had been involved in a relationship with a woman who reported to him, in addition to a woman who was suspected of being a Chinese spy.
NBC News has not confirmed the Times report or reports that the company’s board was meeting Wednesday night. The Wall Street Journal first reported the board’s meeting, citing people familiar with the matter.
Huang wrote in a note to employees Sunday that he had been “unfaithful to his wife,” though he did not specify details. NBC News reported that U.S. intelligence agencies had determined that the first woman, Alice Huang, was a Chinese intelligence operative.
China has denied the allegations, calling them “purely unsubstantiated and directed at smearing China.”
Nvidia did not respond to multiple requests for comment on Wednesday.
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If Nvidia’s stock drop after hours holds through Thursday’s opening bell, it would erase more than $350 billion in value.
Jeffrey Sonnenfeld, an expert on corporate governance and executive leadership and senior associate dean for leadership studies at Yale School of Management, hailed Huang’s contributions to the industry but said the board should move to oust him.
“Because he has lost his legitimacy to lead internally in the eyes of the company, and he’s lost his external credibility in the eyes of key constituents, including customers,” he told NBC News.
Huang is among the most important people underpinning the AI boom and the trillions of dollars of investments tech giants are pouring into it around the globe.
Nvidia chips are the cornerstone of the artificial intelligence boom, powering all of the top developers, from OpenAI to Anthropic. Huang founded the company and has been its leader since 1993, taking the graphics processing chip company from nothing to a valuation of more than $4 trillion.
On Monday, longtime chip sector analyst Stacy Rasgon wrote that removing Huang from the company could pose massive problems for the trillion-dollar firm.
“NVIDIA is not an ordinary company and Jensen is not an ordinary CEO; he IS NVIDIA,” Rasgon wrote. “The primary beneficiary of Jensen’s removal as NVIDIA’s CEO would clearly be China,” he added.
Rasgon said that the the revelations, first announced Sunday by Nvidia and Huang, also had wider implications. “It brings the stewardship of one of America’s most important companies, and the architect of the US AI trajectory, under debate,” he wrote in a note.
In overnight trading, Nvidia shares were not the only to sink. Shares of chipmakers Intel, Qualcomm, and ARM Holdings also fell in after-hours trading as Nvidia dragged the entire sector lower.
As of 9:40 p.m. ET, Nasdaq futures were also lower, pointing to the losses that the U.S. tech industry was set to face at Thursday’s opening bell.
Allie Canal and Peter Nicholas contributed.
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