shares of Nvidia Shares fell more than 9% in after-hours trading Wednesday after the Wall Street Journal reported that the company’s board was preparing to fire CEO Jensen Huang.
The news came minutes after the New York Times reported that Hwang had been having an affair with another executive at the company.
According to reports, the person suspected of having an affair was Kimberly Powell, NVIDIA’s vice president of healthcare. Powell’s bio on Nvidia’s website says she is “responsible for the company’s global healthcare business, including accelerated computing, AI, and visualization hardware and software platforms that power the medical imaging, life sciences, drug discovery, and healthcare analytics ecosystems.”
According to the Times, Huang and Powell were caught on camera making love to each other at a hotel in San Jose, California, in March.
Nvidia did not immediately respond to CNBC’s request for comment. Heller, the crisis communications firm Huang reportedly hired early last year, did not immediately respond to CNBC’s request for comment.
The report was released just days after Mr. Huang admitted to having an affair with a woman who U.S. intelligence agencies believe was a Chinese spy. According to the Financial Times, the CEO is romantically involved with Alice Huang, who U.S. intelligence officials believe is a spy for China’s Ministry of State Security, the New York Times reported.
Nvidia stock price chart.
Nvidia’s board launched an independent investigation and hired the law firm Wachtell, Lipton, Rosen & Katz to investigate the spying allegations.
“I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did,” Huang wrote in a message to NVIDIA staff on Sunday. “I am truly sorry.”
Most of Huang’s Nvidia stock is co-owned with his wife, Lori Huang, and held in trust. These trusts hold approximately 800 million shares. Mr. Hwang personally owns about 70 million shares, giving him limited economic control over the company.
Kimberly Powell, Nvidia’s vice president of healthcare, speaks to CNBC on February 9, 2023 at Nvidia headquarters in Santa Clara, California.
Andrew EversCNBC
Rumors of an affair between Mr. Huang and Mr. Powell have been circulating for years, in part because Mr. Powell has no background in health or science, said a former employee who requested anonymity due to the sensitivity of the matter.
Healthcare is Nvidia’s small business. The company makes chips for medical devices and MRI machines, but the revenue is tiny compared to the revenue it makes from its advanced AI systems and graphics processing units (GPUs). In recent appearances, including at the company’s annual GTC conference, Powell spoke about how Nvidia’s AI technology can accelerate drug discovery, assist healthcare providers and improve clinical efficiency. Powell has led the group since 2017.
Nvidia stock fell 7% this week, on pace for a sixth straight week of declines, reflecting broader concerns about the sustainability of building artificial intelligence. AI infrastructure trade was particularly hard hit after last week’s midterm elections. Democrats won overwhelming victories in both houses of Congress, passing a number of bills that could make it more difficult to build data centers.
Huang has become synonymous with the AI industry and is often referred to by his first name, “Jensen,” by customers and competitors. Nvidia is one of the main beneficiaries of the AI boom, as its chips are used to train models and run large-scale AI workloads.
—CNBC’s Lora Kolodny and Kif Leswing contributed to this report
