Jensen Huang’s affair highlights the risk of NVIDIA’s key man without a successor

Nvidia CEO Jensen Huang’s admission that he had an affair with an alleged Chinese spy has raised questions about his future at the company and what will happen if the 63-year-old co-founder who built the chipmaker into one of the most valuable businesses on the planet is forced out.

Nvidia’s stock price fell more than 4% on Monday, even as the broader market rallied after Huang admitted to the affair in a message to staff on Sunday and said the board would launch an investigation into whether he was a target of foreign intelligence. The board said it had “confidence in Mr. Jensen” and “has no reason to believe that national security or Nvidia’s confidentiality has been compromised.”

The New York Times first reported that the Chinese businessman was a spy for China’s Ministry of State Security, according to people briefed on the information circulated in a memo within the Trump administration this spring. China calls the allegations defamatory.

Nvidia has said Huang will continue to lead the company during the investigation, but pressure is rapidly mounting on the chipmaker whose technology underpinned the first four years of the generative artificial intelligence boom. Sen. Elizabeth Warren of Massachusetts said in a post in the X on Monday that leaders from both parties have called for a meeting, and that Democrats, who are poised to control both houses of Congress, are calling for an investigation and new legislation to “prevent advanced AI chips from fueling China’s military.”

Huang has enormous influence over Nvidia and is the only face of the company without a clear second-in-command. He is also one of the country’s most vocal advocates for AI, has been integral to funding widespread infrastructure improvements, and his close ties to President Donald Trump have given Nvidia a front-row seat when it comes to discussions about AI policy, safety, and regulation.

“NVIDIA’s problem is that there is no clear successor to Mr. Jensen, and we expected him to remain in this role for at least another 10 years,” Melius Research analysts said in a research note on Monday.

“Jensen is Nvidia. Nvidia is Jensen,” Bernstein analyst Stacy Rasgon said Monday on CNBC’s “Squawk on the Streets.” He added that Hwang “runs things pretty much from the top down” and “pulls all the strings, so to speak.”

Nvidia did not respond to requests for comment.

Nvidia has maintained a flat, non-hierarchical organizational structure for many years. Mr. Huang is deeply involved in the company’s day-to-day operations and frequently serves as a spokesperson before world leaders and at industry conferences. In addition to being co-founder and CEO, Huang is also president of Nvidia.

In September 2025, Hwang told CNBC’s Becky Quick that he had 60 direct reports. As of this week, he had 33 direct reports, including CFO Colette Kress, influential chief scientist Bill Daly, senior vice president of software engineering Dwight Dierks, and Ian Buck, best known as the inventor of Nvidia’s CUDA software, according to internal records reviewed by CNBC.

However, when compared to some of the founder’s colleagues in the technology industry, such as meta Mark Zuckerberg and Elon Musk space xYellow minimizes actual control. He owns just over 3% of the company’s outstanding shares and is one of 11 members of the board without a formal chairman.

Furthermore, Mr. Huang is not specifically identified as a key person in the risk factors in NVIDIA’s financial statements. Rather, the company says, “We rely heavily on the services of our long-standing management team.”

“If we are unable to ensure effective succession planning, knowledge transfer, and smooth transition of executives and key employees, our strategic planning, execution, and long-term success may be hampered,” NVIDIA said.

Still, Hwang’s influence is undeniable, to the point that the question of succession is barely talked about among analysts and investors.

Tim Schultz Melander, an analyst at Rothschild & Co. Redburn, wrote in a note Monday that Hwang could be forced to step down as CEO if the board’s investigation reveals “something more significant” than the undisclosed relationship.

However, Schulz Melander said Hwang’s possible resignation is not a foregone conclusion of the investigation and pointed to the importance of Hwang’s leadership at the company.

Nvidia’s board “needs to demonstrate independence and protect shareholders without destabilizing a company whose success is unusually dependent on its founders,” Schulz Melander wrote. “That initial statement suggests it is trying to accomplish both.”

Analysts said the investigation could lead to changes in Nvidia’s governance, including the introduction of a transition contingency plan.

Melius analysts wrote that NVIDIA has a “strong talent pool” of executive talent across its networking, hyperscale and high-performance computing businesses, as well as “technical expertise” from chief technology officer Michael Kagan and chief scientist Dally.

“These people can keep the engine running, but Jensen is unique and his energy will be needed to maintain the AI ​​industry’s trust,” the analysts wrote.

—CNBC’s Kif Leswing, Kristina Partinevelos and Michael Bloom contributed to this report.

WATCH: Here’s how experts react to NVIDIA’s investigation into Jensen Huang.