Nvidia CEO Jensen Huang Resigns; Shares Plunge as Spy Scandal Unfolds

Nvidia co-founder and CEO Jensen Huang resigned effective immediately on Thursday, ending his 33-year run at the world's dominant AI chipmaker after reports of two extramarital affairs — one with a woman U.S. intelligence officials reportedly believe was passing information to Chinese intelligence.

The stock fell roughly 10% in premarket trading, extending a three-day rout that has erased about $600 billion in market value. Nvidia now trades at 12.2 times forward earnings, its lowest multiple since 2012, per Reuters.

The board named CFO Colette Kress interim CEO and appointed longtime director Harvey C. Jones, a director since 1993 and former Synopsys CEO, as the company's first-ever board chair — a newly created position. Short sellers have booked roughly $3.8 billion in paper profits, Reuters reported.

What triggered the resignation?

The cascade began Sunday when the board disclosed an independent investigation into Huang's relationship with Alice Huang (no relation), an executive at Singapore-based cloud provider Megaspeed — a major Nvidia customer. The New York Times reported that U.S. intelligence officials believed Alice Huang was passing information to Beijing while developing a romantic relationship with Jensen Huang. China has denied the espionage allegations.

Jensen Huang sent an apology email to employees on Sunday admitting to an affair without naming the woman. That same day, the board expressed confidence in his leadership.

On Wednesday, the Times reported a second affair — with Kimberly Powell, Nvidia's vice president of healthcare and a direct report to Huang. The paper cited five current and former employees and said the pair were recorded "being affectionate" at a California hotel. When the Times contacted Huang, he replied: "I don't think you should be talking to me directly," and hung up. Nvidia and Powell did not immediately respond to requests for comment. Reuters could not independently verify either affair report.

How did the board act?

Nvidia's 11-member board — all independent except Huang — met Wednesday night; the format and location weren't disclosed. Under company bylaws, the CEO can be removed "with or without cause" by majority vote. Stephen Neal, lead independent director and a Silicon Valley attorney, played a key role in convening the board.

The board retained former acting U.S. Attorney Joon H. Kim to lead the investigation. In its Thursday statement, the board thanked Huang for "immeasurable contributions" but gave no details on findings.

What does it mean for markets and Washington?

Bernstein halved its price target; Baird and Bernstein downgraded the stock, and Morgan Stanley removed it from its Top Pick list.

"Losing Jensen would be a real blow," said Armina Rosenberg of Minotaur Capital, an Nvidia shareholder. "The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk."

Huang's ties to President Trump — who called him "a very honorable man" Monday — and his lobbying for Chinese market access have drawn bipartisan scrutiny. Three Republican committee chairs requested a closed-door briefing, and Senator Kevin Cramer said Huang "should resign." The Trump administration permitted H200 chip sales to China last year at Huang's urging; some lawmakers now signal they may push for tighter export controls.

Megaspeed said Thursday it is cooperating with the U.S. Commerce Department's Bureau of Industry and Security and has hired a U.S. law firm to audit its GPU inventory and export compliance. Bloomberg reported Alice Huang is now in Beijing; Reuters could not verify.

Who leads Nvidia now?

Huang, 63, owns roughly 3.5% of Nvidia and ran a flat structure with dozens of direct reports and no designated second-in-command. The May proxy statement lists him as the only director possessing all eight skills the board deems necessary, including "regulatory, legal and risk management." Three independent directors have served continuously since the 1990s, raising questions about their independence in investigating the founder.

Candidates include Kress (CFO since 2013), Ian Buck — creator of Nvidia's CUDA platform — Arm CEO Rene Haas and co-founder Chris Malachowsky. Polymarket put an 88% probability on Huang's departure by year-end, with Buck favored as successor.

What remains unknown?

The board hasn't disclosed findings or whether national security or trade secrets were compromised. On Sunday it said it had "no reason to believe" either was affected — before the second affair emerged.

A class action filed Monday in San Jose federal court alleges Nvidia and Huang defrauded shareholders by concealing the relationship. The SEC could investigate disclosure failures, and if Huang knew of Alice Huang's alleged intelligence ties, he could face criminal liability under the Economic Espionage Act.

Nvidia's quarterly results are due November 17. The company says operations, customer commitments and product roadmap will continue without interruption. Whether Nvidia's technology lead — backed by roughly $99 billion in ecosystem investments across AI labs and cloud providers, per company disclosures reported by The Verge — holds without its founder is now the central question for a $4 trillion enterprise.