Nvidia’s 33-Year Founder Era Ends as Kress Takes Control

Fortune reported that Nvidia shares fell as much as 13% in premarket trading Thursday after the company’s board accepted co-founder and CEO Jensen Huang’s resignation. The board accepted on Wednesday and announced on Thursday, ending Huang’s 33-year tenure at Nvidia, the central supplier of chips for the AI boom.

CFO Colette Kress, 59, became interim CEO immediately while retaining her CFO role. Nvidia said the board would consider internal and external permanent candidates, with no deadline; longtime director Harvey C. Jones, the former CEO of Synopsys, was appointed the board’s first-ever chair.

What changes for Nvidia after Huang’s exit?

Huang ran Nvidia with a flat organization, roughly 60 direct reports, no chief operating officer and no public succession plan. Fortune reported that analysts had long warned his control over product decisions, industry commitments and customer confidence would be difficult to replicate.

Gil Luria, an analyst at D.A. Davidson, told Fortune that the factors behind Huang’s removal would hasten a transition Nvidia was unprepared for. For customers and developers, the practical test is whether Nvidia’s product roadmap, technology roadmap and software ecosystem can advance without the founder who embodied them.

Nvidia’s board said: “We expect the company's operations, customer commitments and product roadmap to continue without interruption.” Nvidia said Kress joined the company in 2013 after finance roles at Cisco and Microsoft; she is “committed to building on the extraordinary foundation Jensen created.” The Verge reported that internal Nvidia emails described an “extraordinarily difficult period” ahead.

How the board reached the decision

TechCrunch, citing The New York Times, reported that Huang had developed a close relationship with Alice Huang, who is unrelated to him. Alice Huang is a Singapore-based Megaspeed executive whose company bought billions of dollars in Nvidia chips and faces U.S. and Singaporean investigations over possible diversion of controlled semiconductors to China.

Fortune reported that U.S. intelligence officials had deemed Alice Huang a Chinese operative and that Huang had admitted an extramarital affair with her. On November 8, Huang acknowledged in a company-wide letter that he had been unfaithful to his wife and linked the admission to “national security concerns raised in news reports.”

Nvidia’s board announced an independent investigation but said it had “no reason to believe that either national security or NVIDIA secrets were compromised.” On November 11, The Wall Street Journal reported the board was preparing to remove Huang; The New York Times then reported a separate affair with Kimberly Powell, a direct report who leads Nvidia’s health-care and research business.

The New York Times reported that Powell has worked at Nvidia since 2008. Nvidia’s code of conduct says personal relationships can place personal gain in conflict with obligations to the company and may create a potential conflict.

The market and federal response

Nvidia shares fell more than 7% in after-hours trading Wednesday and dropped as much as 13% in premarket trading Thursday, according to Fortune. Fortune reported that Nvidia was scheduled to report quarterly earnings next Tuesday, giving Kress her first public test as interim CEO.

The FBI is investigating Huang’s relationship with Alice Huang, according to The New York Times, while the Justice Department has taken over the probe into Megaspeed’s chip purchases, TechCrunch reported. Three Republican committee chairs have requested a closed-door briefing with Huang and threatened a subpoena, according to TechCrunch.

President Trump called Huang an “amazing guy” and an “honorable man,” Fortune reported. On Monday, he said he believed Huang had not known Alice Huang’s affiliations, The New York Times reported.

What remains unresolved

• Whether Nvidia technology or strategic information reached Chinese intelligence remains unknown. The board’s initial statement cited no evidence of compromise, but Nvidia said its investigation continues.

• Nvidia, Huang and Powell have not confirmed The New York Times report of the second affair. Huang reportedly told a Times reporter, “I don't think you should be talking to me directly,” before hanging up.

• Nvidia has given no timetable or selection criteria for the permanent CEO search beyond weighing internal and external candidates. The board has not said when it will appoint a successor.

• Potential legal exposure also remains unclear. Analysts cited by Fortune noted that the SEC charged former McDonald’s CEO Steve Easterbrook with misleading investors about the circumstances of his ouster over workplace relationships.

Nvidia now faces a two-part test: keeping its product cadence and customer commitments intact while federal probes and congressional scrutiny continue. The board’s continuity pledge will face its first public test at next Tuesday’s earnings report, before a permanent CEO has been selected.