Nvidia board weighs ousting Jensen Huang as shares tumble

Nvidia's board of directors met late Wednesday to discuss removing Jensen Huang as chief executive, according to people familiar with the matter cited by the Wall Street Journal, escalating a governance crisis that has erased hundreds of billions of dollars from the chipmaker's market value in four days. Nvidia did not respond to requests for comment on the meeting.

The board's deliberations followed a Nov. 8 statement from Nvidia's board announcing an independent investigation into whether Huang, the company's 63-year-old co-founder, had been the target of a foreign intelligence operation. That inquiry deepened this week when the New York Times reported a second allegation of personal misconduct against Huang, on top of an earlier admission that he had been unfaithful to his wife. Reuters said it could not independently verify the new report, and Nvidia did not respond to a request for comment on it.

A board inquiry escalates

The crisis began Nov. 8, when Huang wrote in a memo to employees that he "was unfaithful to my wife" and that his "actions hurt her and our children," adding, "there is no excuse for what I did. I am deeply sorry." The same day, Nvidia's board said it was opening an independent investigation after press reports that Huang had been targeted by a foreign intelligence effort, to be overseen by a committee of independent directors with outside counsel. The board said it had "no reason to believe" that U.S. national security or Nvidia's trade secrets had been compromised, and that it retained "confidence in Jensen and his leadership team."

The reports at the center of the inquiry, first published by the New York Times, described a close relationship between Huang and Alice Huang (no relation), a former executive at Megaspeed, a Singapore-based firm that has purchased billions of dollars of Nvidia chips and hardware. U.S. officials reportedly assessed that she had been recruited by China's Ministry of State Security. China's Foreign Ministry has called the allegations "baseless" and "smears." Separately, two law enforcement officials told CBS News that the Justice Department is investigating Megaspeed over possible violations of U.S. export controls on advanced AI chips; Nvidia has denied any involvement in illegal chip transfers.

By Wednesday, the Times had also reported, citing people who worked at the company, a second alleged relationship between Huang and an Nvidia executive who reports directly to him — a claim Nvidia and the executive did not respond to. Hours later, the Journal reported the board was preparing to act on Huang's removal, and CBS News reported that the company's market value had already fallen by more than $450 billion since the Nov. 8 announcement.

Who can remove a chief executive

Nvidia's board has 11 members, all but Huang considered independent, and under the amended bylaws Nvidia has filed with the Securities and Exchange Commission, "any officer may be removed from office at any time, either with or without cause," by a majority vote of sitting directors. That provision — distinct from a separate, harder-to-trigger process for removing a board director — means Huang's fate rests with his fellow directors rather than shareholders.

Huang co-founded Nvidia in 1993 and has run it ever since, turning a graphics-chip maker into the dominant supplier of processors for artificial intelligence and, for much of the past year, the world's most valuable public company, with a market capitalization that topped $4 trillion. He holds roughly 3.6% of Nvidia's outstanding shares. Bloomberg reported that the board has been working with an outside firm to identify potential successors, with Nvidia's finance chief, Colette Kress, and data-center executive Ian Buck both named by analysts and investors as possible candidates for an interim or permanent role. The company has no publicly disclosed succession plan.

Markets and Washington react

Nvidia shares, which had closed Wednesday at $173.73, fell more than 8% in after-hours trading once the Journal's report spread, and were still down more than 6%, near $162, in premarket trading Thursday. Should those losses hold, Reuters reported the company would have lost roughly $600 billion in market value since the inquiry became public. The ripple effects were visible across the chip sector: Micron and Nvidia-dependent cloud firm CoreWeave fell in tandem with Nvidia after hours, while rivals Advanced Micro Devices and Broadcom rose, and Samsung Electronics and SK Hynix moved in Asian trading.

Wall Street's reaction was divided. Wedbush Securities analyst Dan Ives said "the writing is on the wall that Jensen's days at Nvidia could be numbered," while Bernstein cut its price target to $200 from $400 and downgraded the stock to market-perform; Baird also downgraded it to neutral. Raymond James, keeping a "strong buy" rating, wrote that "we doubt the distraction created by the CEO's indiscretions alters the fundamentals." Futurum Group analyst Shay Boloor argued the business itself was insulated: "I don't see the next 12 to 18 months of revenue suddenly disappearing if Jensen were to leave."

"Losing Jensen would be a real blow. The bigger question for us is who leads Nvidia's technology roadmap over the long term," said Armina Rosenberg, portfolio manager and co-founder of Minotaur Capital, a Nvidia shareholder.

In Washington, Republican chairs of the House committees on China, foreign affairs and intelligence have asked Huang to appear for a closed-door briefing on his dealings with Alice Huang and Nvidia's safeguards against foreign espionage, proposing Nov. 18 and asking him to accept or counter-propose by Nov. 11, according to ABC News; lawmakers have signaled a subpoena is possible if he does not respond. President Donald Trump, who said he spoke with Huang on Monday, told reporters he believed Huang's account that he "had no idea" the woman was a spy and called him a "very high-quality person." Nvidia also faces a securities lawsuit alleging it failed to adequately disclose information about Huang's relationship with the alleged intelligence asset.

No decision from Wednesday's board meeting had been disclosed as of Thursday morning. Nvidia is scheduled to report fiscal third-quarter earnings on Nov. 17, a date that now doubles as the next checkpoint for investors trying to gauge whether the company's board, its business, or its chief executive emerges first from the inquiry.