SANTA CLARA, Nov 11 - Nvidia's board is meeting late Wednesday to decide whether to oust its chief executive officer (CEO) Jensen Huang, a source familiar with the matter told Reuters, as the world's dominant supplier of artificial intelligence (AI) chips grapples with reports of two extramarital affairs involving its longtime leader.
Nvidia did not immediately respond to a request for comment on the board meeting.
The meeting marks a sharp shift from Sunday, when Nvidia's board expressed confidence in Huang and his leadership team. Under Nvidia's bylaws, Huang can be removed "with or without cause" by a majority vote of directors.
Nvidia has 11 directors and considers all but Huang independent.
Nvidia's stock slid more than eight per cent in extended trading after the Wall Street Journal first reported that the company was preparing to fire Huang. If those losses hold, Nvidia will have lost about US$600 billion (RM2.44 trillion) in market value since the board announced an investigation into his relationship with a businesswoman named Alice Huang, alleged to be a Chinese spy.
Revelations that United States (US) intelligence was probing Alice Huang for facilitating shipments of Nvidia chips to Chinese firms set off a series of events: Wall Street Journal began raising questions about Nvidia's governance and Jensen Huang's personal conduct, the company's board launched an internal investigation and hired outside counsel, while lawmakers began to push for tighter curbs on chip exports to China.
"The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk. Losing Jensen would be a real blow," said Minotaur Capital co-founder and portfolio manager Armina Rosenberg, whose company holds Nvidia shares.
No obvious successor
Huang's potential departure would leave a leadership vacuum at the roughly US$4 trillion (RM16.33 trillion) chipmaker he co-founded and built over more than three decades to become the top supplier of chips at the centre of the global AI boom and US-China technology rivalry.
Huang, 63, has no obvious successor and owns about 3.6 per cent of Nvidia's stock. He also has dozens of direct reports, underscoring the tight control he maintains over the company.
On Wednesday, Bloomberg reported that Nvidia's board has been working with an outside firm to identify potential replacements for Huang, citing a person familiar with the situation.
Rosenberg said chief financial officer Colette Kress, who has held the role for more than a decade, would be the natural choice as an interim CEO, but said the bigger question was who would lead Nvidia's technology roadmap longer term.
Odds on prediction market website Polymarket shifted sharply to show an 88 per cent chance that Huang would resign or be removed by the end of the year. Odds for his successor favoured Ian Buck, who oversees the business that serves Nvidia's data centre clients.
The leadership turmoil comes just days before investors are set to hear from the company on its financial performance and outlook, with its quarterly results due on November 17.
Earlier in the day, the New York Times reported that Huang had also had an extramarital affair with a company executive who reported to him. Citing five people who worked at the company, it revealed that the relationship was with Nvidia's vice president of healthcare Kimberly Powell.
When the New York Times reached him by phone on Wednesday and asked about his relationship with Powell, Huang said, "I do not think you should be talking to me directly." He then hung up.
Nvidia and Powell did not immediately respond to requests for comment. Reuters could not immediately verify the report.
Market fallout
US stock futures sank, with Nasdaq futures down one per cent. Micron fell nearly two per cent, and CoreWeave dropped six per cent in after-hours trading. However, shares of rival chipmakers AMD and Broadcom rose four per cent and three per cent, respectively.
In Asia, Samsung Electronics rose about one per cent, while SK Hynix dipped nearly one per cent.
Investors and analysts said while demand for Nvidia's chips would be unlikely to drop in the near term, the broader universe of companies backed by Nvidia - largely customers building data centres that will use its chips - might suffer.
"They are financing their customers. In these types of booms or bubbles, sometimes all it takes is a slowdown to shift it into the bust phase," said Singapore-based Vantage Point Asset Management chief investment officer Nick Ferres.
Investigation widens
In a memo to employees on Sunday, Huang acknowledged being unfaithful to his wife and took "full responsibility," but gave no details about the relationship.
US President Donald Trump said he had not discussed the allegations with Huang but voiced support for the Nvidia chief, a close ally.
Huang faces a potential congressional subpoena if he does not respond to a request to provide a closed-door briefing about the allegations of his affair with a Chinese spy.
Separately, Axios reported on Wednesday, citing high-level sources, that US Commerce Secretary Howard Lutnick stalled Trump's crackdown on companies suspected of diverting Nvidia's chips to China.
The White House and a spokesperson for Lutnick did not immediately respond to requests for comment.
