Jensen Huang, the face of the AI boom, resigned as CEO of Nvidia after a scandal
Kyiv • UNN
Harvey Jones became chairman of Nvidia's board, while Colette Kress became interim CEO. The company's shares fell 11%, wiping out $450 billion in market capitalization.
Nvidia Corp. Chief Executive Officer Jensen Huang, the most prominent figure in the AI infrastructure boom, was removed from his position following reports of two affairs, including one with a woman suspected of spying for China. Bloomberg reports, UNN writes.
Details
Chief Financial Officer Colette Kress was appointed interim chief executive officer. The board of directors, which had previously never had a chair, appointed 73-year-old Harvey Jones to the position. Jones, who had served on the board for many years, previously headed Synopsys Inc., a company in which Nvidia acquired a $2 billion stake last year.
Nvidia shares fell more than 11% to $155.13. The company's market capitalization declined by $450 billion.
The company's statement did not specify whether Huang would continue working with Nvidia.
"Jensen's contribution to Nvidia is immense. Nvidia is one of the world's most significant technology companies. The board of directors and the company thank Jensen for his invaluable contribution to the company and the industry," the board of directors said in a statement.
Huang, one of the three engineers who founded the chipmaking company in 1993, had been under intense pressure since Sunday, when he admitted to a romantic relationship with Alice Huang, a former executive at Singapore-based data center company Megaspeed International.
Huang's resignation deepens a crisis partly created by Nvidia itself, given the lack of a clear succession plan for the 63-year-old leader, who had been the company's only chief executive officer. "Perhaps more than any other founder in the technology world, Huang built Nvidia around himself and his vision of the right way to run the company," the publication notes.
On Thursday, the crisis surrounding Nvidia spread across the entire AI complex, dragging down shares of semiconductor companies such as Micron Technology Inc. and Marvell Technology Inc., so-called neocloud companies such as CoreWeave Inc. and Nebius Group N.V., and even putting pressure on AI-adjacent companies, including energy equipment manufacturers Vertiv Holdings Co. and Bloom Energy Corp. On the other hand, shares of Nvidia competitors such as Advanced Micro Devices Inc. and Broadcom Inc. rose.
"Overall, Nvidia is suffering a colossal loss of trust," Bloomberg Intelligence analyst Mandeep Singh said in an interview with Bloomberg Television. "Given their importance in the AI ecosystem and everything they have done in terms of deals," Singh said, Huang's resignation could affect non-cloud services that provide computing resources for AI, as well as developers of open-source and open-weight AI models.
Kress, who joined Nvidia 13 years ago after working at Microsoft Corp. and Cisco Systems Inc., has held financial positions throughout her career. Although she represented the company at Wall Street-related events, her public activities were limited to Nvidia's financial results, and most communication with the financial community was handled by her former boss.
Under Huang's leadership, Nvidia shares soared more than 700,000% since the company went public in 1999. The company's market capitalization at times exceeded $5 trillion, placing it among the world's largest companies. The staggering growth eclipses all the achievements of Steve Jobs at Apple Inc., Bill Gates at Microsoft Corp., or Jeff Bezos at Amazon.com Inc.
Huang's resignation threatens to have far-reaching consequences beyond Nvidia, the publication notes. He used Nvidia's financial strength to support dozens of major AI players, including leading laboratories OpenAI and Anthropic PBC. He also invested in and supported financial deals for cloud computing companies, including CoreWeave Inc., inspiring others to strike similar deals with one another to strengthen the entire AI ecosystem. Big names on Wall Street, including Michael Burry, known from the film "The Big Short," warned that such closed-loop deals artificially inflate demand for AI.
"As a specialist in economic history, I don't know whether there has ever been such a pivotal person who controlled such a large part of this industry," said Blue Bear Capital investor Thomas Ferguson of Huang, speaking at the BNEF summit in Houston on Wednesday before his resignation.
Huang also spearheaded major efforts to promote the expansion of data centers around the world, traveling extensively to speak at conferences, lectures, and other events. Dressed in his signature leather jackets, he attracted crowds of fans captivated by Jensanity.
He also grew close to U.S. President Donald Trump, appearing at White House meetings on technology, state dinners, and aboard the presidential aircraft Air Force One. Huang had far greater access to the U.S. president than most corporate executives, the publication notes. On Monday, Trump backed Huang, calling him "a very honest person."
Revelations about Nvidia CEO Huang's affair with Alice Huang, the head of Megaspeed, have raised serious questions about his judgment, the publication notes. On Wednesday, The New York Times reported, citing unnamed company employees, that Huang also had a relationship with Kimberly Powell, Nvidia's vice president of healthcare.
Megaspeed, which spun off from a Chinese gaming company, is one of Nvidia's largest customers in Southeast Asia and has been under U.S. investigation for several months over the potential smuggling of advanced Nvidia artificial-intelligence chips to China, Bloomberg reports. Megaspeed and Nvidia deny any wrongdoing.
Nvidia's board of directors is working with an outside firm to search for potential candidates to replace Huang, a source familiar with the situation said Wednesday. According to sources familiar with the situation, the board held a remote meeting on Wednesday to discuss Huang's future.
Among the prominent technology-company executives whom industry representatives identify as potential candidates for chairman of Nvidia's board are Lisa Su, CEO of rival Advanced Micro Devices Inc.; Rene Haas, head of Arm Holdings Plc; and Sanjay Mehrotra, head of Micron Technology Inc.
U.S. lawmakers urged Huang to appear before congressional committees and threatened to subpoena him if he did not. Nvidia's board of directors said Tuesday that it had hired Wachtell, Lipton, Rosen & Katz partner June H. Kim, a former federal prosecutor, "to conduct a thorough and independent investigation."