Nvidia board weighs ousting CEO Jensen Huang after second affair allegation

Nvidia's board is meeting to decide whether to remove founder Jensen Huang as chief executive after a second affair allegation surfaced, deepening a crisis that has wiped hundreds of billions from the chipmaker's market value.

The Wall Street Journal reported the board could convene as soon as Tuesday to determine Huang's future, according to people familiar with the matter. The New York Times, citing five current and former employees, alleged Huang had a relationship with Kimberly Powell, Nvidia's vice-president of healthcare, who has worked at the company since 2008. The Times reported the pair were seen being affectionate at a hotel during a company conference in March, and that a security guard approached a bystander who photographed the interaction with an offer to sign a nondisclosure agreement.

Media additions

The revelation follows Huang's admission on Sunday that he had been unfaithful to his wife with Alice Huang, a former Megaspeed executive whom US intelligence officials reportedly concluded was a Chinese intelligence asset. The board announced an independent investigation the same day, stating it had no reason to believe that either national security or NVIDIA secrets were compromised. Huang wrote in an email to employees that he took responsibility, stating, 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, according to Fortune India. He added: I support the investigation and will cooperate fully. I love our country and our company, and I am committed to protecting NVIDIA and supporting America’s national security.

Stock slides and market fallout

Shares extended their decline Tuesday, falling roughly 5% after dropping 4% in the prior session. Fortune India calculated Monday's decline wiped approximately $190 billion off market capitalization, with shares hitting a seven-month low at $178.67.

According to Business Today, Jensen Huang slipped from eighth to 12th place on Forbes' Real-Time Billionaires list over two trading sessions, losing a combined $16 billion and bringing his net worth to $146.8 billion. The wider semiconductor market wavered during the sell-off, while rivals such as Advanced Micro Devices and Broadcom saw gains, as reported by CNBC and Yahoo Finance.

Political scrutiny has also mounted. United States President Donald Trump told reporters at the White House that the Federal Bureau of Investigation was looking into Huang's relationship, though he expressed support for the chief executive and stated he believed Huang had no idea the woman was a spy. Meanwhile, House Democratic Leader Hakeem Jeffries stated that Congress needs more answers regarding the situation.

Legal challenges have followed the disclosures as well. A class-action shareholder lawsuit was filed against Nvidia and Huang in federal court in San Jose, California, by the Rosen Law Firm on behalf of an investor. The suit alleges the defendants made false or misleading statements regarding Huang's affair and the company's relationship with Megaspeed, presenting a material risk to the business.

What happens next

Market analysts, including Dan Ives of Yorkville Ives & Co., note that an independent board investigation could take four to six weeks, creating an ongoing overhang for the stock until further findings emerge. Meanwhile, the board's deliberations on Huang's future as chief executive continue alongside separate inquiries by federal authorities.