Jensen Huang resigned as chief executive of Nvidia on Thursday, ending a 33-year run at the chipmaker he co-founded and led through its rise to the centre of the artificial intelligence boom. The Jensen Huang resignation followed a week of reports about his extramarital affairs. One involved a woman United States intelligence agencies suspect is a Chinese spy. Nvidia said the resignation takes effect immediately.
Colette Kress, the company’s chief financial officer and executive vice president since 2013, will serve as interim chief executive while the board searches for a permanent successor after the Jensen Huang resignation. Nvidia said it is considering internal and external candidates for the job. The board also named Harvey C. Jones, an entrepreneur and venture investor, as its first chairman.
What led to the Jensen Huang resignation
The New York Times reported on November 11 that Huang had an affair with Kimberly Powell, Nvidia’s vice president of health care, who reports directly to him. The report said Powell was captured on video being affectionate with Huang at a hotel during a company conference in March. The report added pressure on a board that had previously expressed confidence in Huang.
The more serious questions concern Alice Huang, a former executive at Megaspeed International who also goes by the name Huang Le. The Times reported last month that United States intelligence agencies had determined she was feeding information directly to Beijing. China has denied the claim and called it unsubstantiated.
Megaspeed, a Singapore-based maker of artificial intelligence infrastructure, was accused last year of illicitly shipping advanced Nvidia computer chips into China. Singaporean authorities questioned Alice Huang and confiscated her passport last year as part of an investigation into Megaspeed. They barred her from returning to the country.
On Sunday, Huang sent an email to Nvidia employees in which he apologised for being unfaithful to his wife. He wrote that his actions had hurt his wife and children. Nvidia said at the time that it was investigating whether Huang had been the target of a foreign intelligence effort. The company said it had no reason to believe that national security or Nvidia secrets were compromised. The Jensen Huang resignation came four days after that email.
The board met late on Wednesday to decide Huang’s future, and the Jensen Huang resignation followed within hours. The board had hired the New York law firm Wachtell, Lipton, Rosen and Katz to conduct an independent investigation. Later on Thursday, Reuters reported that Huang had an intimate relationship with a second Nvidia employee.
Colette Kress takes over as interim chief
Kress, 59, spent years as the Nvidia executive most willing to challenge Huang’s large and often risky bets on artificial intelligence, according to two people familiar with the matter who spoke to Reuters. In a statement on Thursday, she said Nvidia’s strength had always come from its people and that she was committed to building on the foundation Huang created over the last 33 years. She takes the top job days after the Jensen Huang resignation.
Investors reacted at once to the Jensen Huang resignation. Nvidia shares slumped 14 percent on Thursday to their lowest level in nearly 16 months, then pared losses to close down 4.3 percent, Reuters reported. Stephanie Balaouras of Forrester called the resignation a test for Nvidia and the wider artificial intelligence boom.
Investigations and the Trump angle
The Jensen Huang resignation has also drawn Congress into the matter. President Donald Trump was briefed about the intelligence findings involving Huang well before the scandal became public. Trump has said Huang told him he had no idea that Alice Huang was a spy. Trump later said the Federal Bureau of Investigation is looking into the affair. Three Republican committee chairmen wrote to Huang asking him to appear before their committees, and Huang has agreed to testify about his interactions with Alice Huang before Congress by Thanksgiving, according to NBC News.
John Moolenaar, chairman of the House select committee on the Chinese Communist Party, warned that Huang would likely face a subpoena if he refused to meet the committees. Democratic Senators Elizabeth Warren and Chris Coons have asked the Trump administration to preserve all documents tied to Nvidia’s chip exports to China, according to the Wall Street Journal. A shareholder lawsuit filed in federal court in San Jose, California, alleges that Nvidia misled shareholders about the affair.
What the Jensen Huang resignation means for Nvidia
The Jensen Huang resignation leaves Nvidia without the leader who ran the company for 33 years. Trump praised Huang after the news broke, saying he had done a fantastic job, and suggested former Apple chief executive Tim Cook as a replacement. Nvidia said its board will consider internal and external candidates for the permanent chief executive job.