Nvidia shares dropped 7.7% to $160.28 on Thursday after Jensen Huang resigned as CEO, president, and board member with immediate effect. The stock had already fallen to $148.80 in early trading before stabilizing slightly. This move followed the company’s confirmation that Chief Financial Officer Colette Kress would serve as interim CEO while the board searches for a permanent successor from inside and outside the firm. The resignation ended a 33-year tenure at the helm of the chipmaker Huang co-founded in 1993. It follows reports that Huang had affairs with a suspected Chinese intelligence asset and an Nvidia executive who reports directly to him.
The Scandal Unfolds
Huang acknowledged in a staff letter four days ago that he had been unfaithful to his wife, which prompted the board to open an independent investigation. The New York Times reported that U.S. officials concluded Alice Huang, an executive at Singapore-based customer Megaspeed, was a Chinese intelligence asset. A U.S. government memo later stated the two were romantically involved, though China has denied the allegations. On Wednesday, the Times reported that Huang also had a relationship with Kimberly Powell, Nvidia’s vice president of health care. The Wall Street Journal added that the board was preparing to oust him, adding pressure to his position. The scandal wiped hundreds of billions of dollars off Nvidia’s market value, with the company losing about $430 billion in two days earlier this week.
The board named Harvey Jones, former CEO of Synopsys, as its first-ever chair. Jones said, "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." Kress stated she was "committed to building on the extraordinary foundation Jensen created over the last 33 years." Nvidia will report third-quarter results as scheduled on Tuesday. Huang remains the largest shareholder with a stake of about 3.6%, according to the Journal. One person inside the company told the Financial Times that naming Kress was the simplest option, while other candidates included Ian Buck and Arm CEO Rene Haas.
Market Reactions and Industry Impact
Jensen Huang’s departure has plunged the AI industry into uncharted territory, creating a corporate earthquake that dwarfs the chaos from Sam Altman’s temporary firing from OpenAI in 2023. Economist Mohamed El-Erian warned of contagion across the AI sector, noting, "This is no ordinary CEO. This is no ordinary company. This is no ordinary sector. This is no ordinary time." Analyst Dan Ives claimed Nvidia was worth 25% less without Huang. The timing is fraught for Anthropic, whose historic IPO looms as a referendum on Wall Street’s faith in the AI trade, backed by a $10 billion commitment from Nvidia.
Huang ran Nvidia with about 60 executives reporting directly to him and did not believe in succession planning, leaving the company without an obvious successor. His downfall comes amid mounting anxiety over the AI industry’s future, as new financial, political, and regulatory risks threaten one of the largest infrastructure buildouts in history. Top Senate Democrats are demanding that Commerce Secretary Howard Lutnick preserve records of dealings with Nvidia and Huang, laying groundwork for a sweeping investigation. Veteran China watcher Bill Bishop wrote, "There is rarely just one lie," after Huang acknowledged his first affair. The blast radius could extend beyond Silicon Valley, threatening to engulf the Trump administration in a scandal over sensitive technology exports to China.
