Nvidia shares sink after reports board may oust CEO Jensen Huang

The headlines and the market move

Nvidia dropped more than 9% in late trading Wednesday after the Wall Street Journal said the board is preparing to push out Jensen Huang, with a meeting possible as soon as that night. At 7:47 PM EST, a live quote showed shares at 159.39, down 14.34 or 8.25% after hours, following a 173.73 close, up 4.84 or 2.87%.

That slide came on top of a 7% decline earlier in the week, putting the stock on pace for a sixth straight weekly loss as investors question how durable AI spending will be. Following the midterm elections, AI infrastructure plays slumped sharply last week, after Democrats secured sweeping majorities in both chambers of Congress and numerous ballot initiatives passed that may complicate the construction of data centers.

What the reports say

The Journal's report hit just after the New York Times said Huang had an extramarital relationship with Kimberly Powell, Nvidia's vice president of health care. According to Powell's company bio, she oversees the global health care unit, covering hardware and software used in accelerated computing, AI, and visualization to support health care analytics, along with applications in life sciences, medical imaging, and drug discovery. The Times also reported the pair were recorded being affectionate at a San Jose hotel in March.

Requests for comment went unanswered by Nvidia and by Powell. Heller, the crisis communications firm Huang reportedly brought on as early as last year, also did not immediately respond. Days earlier, Huang acknowledged an affair with a woman identified as Alice Huang. The Financial Times and the New York Times reported that U.S. intelligence officials assess that she works as a spy for China's Ministry of State Security.

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Company response and the investigation

Nvidia's board launched an independent investigation and hired Wachtell, Lipton, Rosen & Katz to examine the spying allegations. In a Sunday note to employees, Huang said he had been unfaithful to his wife, stated that his behavior hurt his wife and children and was without excuse, and offered a heartfelt apology.

Most of Huang's Nvidia stake is held together with his wife, Lori Huang, in trusts that hold roughly 800 million shares. He personally controls about 70 million shares and exercises only limited economic influence over the company.

Why this matters for your portfolio

Health care is a smaller line of business for Nvidia. The company provides processors used in medical devices and MRI machines, though that income is minor compared with revenue from advanced AI systems and GPUs. Powell has led the group since 2017 and, in recent talks including at GTC, has highlighted how Nvidia's AI can speed up drug discovery, support providers and improve clinical efficiency. A former employee said talk about Huang and Powell has been around for years, pointing to Powell's lack of a formal health or science background.

Huang is closely associated with the AI boom and is often called "Jensen" by customers and rivals. Nvidia has emerged as a major beneficiary of the boom, as its chips power the training of models and the execution of large AI workloads. The bottom line: leadership questions, an active board probe and a cooler AI buildout trade are now part of the risk calculus for Nvidia exposure.

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