Nvidia CEO Jensen Huang has resigned following intense scrutiny after admitting to an extramarital affair with an alleged Chinese spy, the company announced on Thursday.
The company’s chief financial officer, Colette Kress, will serve as interim CEO.
Shares of Nvidia extended their losses following Huang’s resignation, declining more than 12 percent as of 9:19 a.m. ET.
“The Board has full confidence in Colette and the leadership team, and we expect the company’s operations, customer commitments and product roadmap to continue without interruption,” board chair Harvey Jones said in a news release.
Kress has served as the company’s CFO since 2013, overseeing its finances during a period of rapid growth. Prior to joining Nvidia, she spent nearly 25 years in finance leadership roles at major technology companies, including Cisco and Microsoft.
“NVIDIA’s strength has always come from its people, and together with our leadership team, I am committed to building on the extraordinary foundation Jensen created over the last 33 years,” Kress said in a statement.
Days earlier, the chip giant launched an investigation into Huang after he admitted on Nov. 8 to having an affair with a woman who was suspected of being a spy for the Chinese Ministry of State Security.
Alice Huang, who is not related to the CEO, allegedly had the task of gathering intelligence on Jensen Huang and U.S. artificial intelligence (AI) chips while trying to encourage Nvidia to make its most advanced chips available for China.
Before she became a top executive at a Singapore-based data center company called Megaspeed, one of Nvidia’s largest customers in Southeast Asia, Alice Huang had professional experience in broadcast journalism, banking, and securities in China.
Huang, one of the wealthiest men in the world, apologized in a message to Nvidia employees on Nov. 8.
“I owe my family and all of you an apology,” Jensen Huang wrote. “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.
“To my wife and family: I love you. I know an apology cannot undo what I have done. I hope our family will heal and that, over time, I can earn back your trust.”
The Nvidia board emphasized its commitment to U.S. national and economic security, as it named on Nov. 10 law firm Wachtell, Lipton, Rosen & Katz to lead the probe into whether Jensen Huang was the target of a foreign intelligence effort.
When announcing the internal investigation on Nov. 8, the board had said it had no reason to believe that either national security or Nvidia secrets were compromised.
A Nov. 11 report in The New York Times, citing five people who worked at Nvidia, claimed Huang also engaged in a separate affair with Kimberly Powell, Nvidia’s vice president of healthcare.
President Donald Trump stood behind Jensen Huang when questioned about what he thought about the investigation and suggested the Nvidia CEO could join him on his trip to China next week.
“I just know he’s a fine person, but you never know what is going on. I hope everything’s fine,” he told reporters on Nov. 8, adding that the FBI is conducting its own investigation into Jensen Huang.
“He’s a fine person, in my opinion.
“I think he’s an honorable guy. I think he probably has an excuse for it. … He’s done an amazing job for our country.”
Nvidia and Jensen Huang were sued by shareholders on Nov. 9, who accused the company and CEO of defrauding them by concealing the CEO’s affair with the alleged spy.
Democratic House members have called for tightening restrictions on advanced-chip exports to China.
The scandal has also impacted relations between Washington and Beijing, which U.S. Ambassador to China David Perdue described as “bumpy.”
“The situation with Nvidia is another reminder that we have to stay diligent,” Perdue told Bloomberg Television on Nov. 11.
“National security is part of this economic conversation because economic security is national security,” he said. “And so, what we’re doing with China is bumpy right now.”
Wall Street Reaction
Selling pressure in Nvidia dragged the broader tech-heavy Nasdaq Composite Index lower, down more than 1 percent in pre-market trading.
Nvidia has lost more than $500 billion in market value since Huang admitted to infidelity. Despite the selloff, Nvidia remains one of the world’s richest companies, with a roughly $4 trillion value.
The other leading benchmark averages—the blue-chip Dow Jones Industrial Average and the broad-market S&P 500—were little changed.
Industry competitors, meanwhile, have been edging higher this week as investors bought the dip in technology stocks.
Advanced Micro Devices (AMD) has rallied more than 20 percent over the past week, while Broadcom has risen around 10 percent in the same span. Intel has jumped around 10 percent.
World Without Jensen Huang
With many agreements already locked in for 2027 and 2028, near-term fundamentals will remain solid, says Ryuta Makino, a software and semiconductor analyst at Gabelli Funds.
“The longer-term … is where I would watch for,” Makino told The Epoch Times in an emailed note. “So 2029 and 2030 are years that may be impacted more broadly.”
This could also create risks for AI infrastructure spending and the broader ecosystem, Makino added.
“I am still assessing the impact, but there will definitely be a ripple effect to the AI supply chain given a lot of this was propped up by Jensen himself,” he said.
Other Wall Street analysts have downgraded their outlook for Nvidia.
Dan Ives, partner and senior managing director at Yorkville Ives, estimates the stock’s value would be worth about 25 percent less without Huang at the helm.
Ousting Huang may alter Nvidia’s future direction and create a “dramatically different competitive environment” for AI graphics processing units worldwide, “especially for China,” he said in a Nov. 10 X post.
“In our view, writing is on the wall that Jensen’s days at Nvidia could be numbered, and we would expect this to be a very fluid situation over the next 48 hours,” Ives wrote in a Nov. 11 X post.
“Jensen has created a black eye moment for himself and Nvidia and now has created a spider web of complexity.”
But others say the company has grown so much that it is no longer about one person.
While Huang’s leadership will be missed, “Nvidia is going to survive and do well,” says Bob Lang, founder and chief options analyst at Explosive Options.
“What we’ve been seeing in Nvidia’s stock price is people trying to figure out what the company is really worth without Jensen Huang, and what sort of value he adds to the company,” Lang told The Epoch Times in an emailed note.
Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments, likened the situation to Apple after Steve Jobs’s departure.
“We were told Apple would never innovate again and the stock price wouldn’t go up after Steve Jobs, but Tim Cook did a pretty good job and 1,000 percent total returns,” Tengler said in a note emailed to The Epoch Times.
Market watchers still maintain a consensus “buy” rating and a 77 percent 12-month upside price target. But many companies have also lowered their price targets or downgraded their expectations for Nvidia, according to MarketBeat.
Evercore downgraded from “outperform” to “in line.” Baird lowered its rating from “outperform” to “neutral.” Ives estimates the stock is worth $300 with Huang and $225 without him.
More details are expected when Nvidia releases its third-quarter earnings report next week and holds a conference call with analysts.
Correction: An earlier version of this article misspelled the name of Colette Kress. The Epoch Times regrets the error.
