Nvidia CEO Jensen Huang resigns amid personal scandal

[US], November 13: Jensen Huang resigned as chief executive of AI giant Nvidia on Thursday, the company said, after revelations he had two extramarital affairs, including one with a woman accused of spying for China. Chief financial officer Colette Kress will serve as interim CEO while the board searches for a permanent successor, ending Huang's 33-year run at the helm of the global juggernaut he co-founded. Huang, 63, also gave up his seat on the board. The company did not give a reason for his departure.
The scandal has sent shares of the multi-trillion-dollar company plunging, and the exit of Huang, who has been a key promoter of the artificial intelligence boom, leaves Nvidia without its founding leader at a crucial time for the sector. Nvidia shares were down more than 10 percent in premarket trading Thursday following the announcement. The stock was already down around 25 percent from its all-time high in early October. Beijing has rejected the spying allegations.
The board said it had appointed Harvey Jones, a former chief executive of chip design software firm Synopsys, as its first-ever chair. "The Board has full confidence in Colette and the leadership team, and we expect the company's operations, customer commitments and product roadmap to continue without interruption," Jones said in a statement. Kress said she was committed to "building on the extraordinary foundation Jensen created over the last 33 years." The scandal began with reports that Huang, who has been married to Lori Huang for more than 40 years, was involved in an extramarital relationship. Jensen Huang admitted on Sunday to having an affair, reportedly with Alice Huang, who was a senior executive at Singapore-based data center company Megaspeed. The two are not related. US intelligence reportedly circulated a memo this spring alleging Alice Huang was an asset of China's Ministry of State Security.
On Sunday, Nvidia's board announced a probe into what it called reporting that Huang had been the target of a "foreign intelligence effort," while saying it retained confidence in him. On Wednesday, The New York Times reported that Huang had a second extramarital affair, citing video evidence of him being affectionate with Nvidia's vice president of health care, Kimberly Powell. Powell, 48, has been a public face of Nvidia's efforts to expand its technology into higher education and health care.
She was speaking at a conference in San Jose, California, where the two "were seen being affectionate at the hotel" by bystanders, the Times reported. Nvidia's code of conduct tells employees to avoid conflicts of interest and cites the example of "personal relationships." Nvidia shareholders have filed a class action lawsuit against Huang and the company for failing to disclose information about the relationship toinvestors.
Huang had repeatedly avoided naming a successor when the question was raised. Kress joined Nvidia as finance chief in 2013 after nearly 25 years in finance roles at companies including Cisco and Microsoft. Founded in 1993, Nvidia designs graphics processing units (GPUs), components originally created to handle 3D visuals in video games that have become the backbone of AI systems. Its processors are mostly made by Taiwanese company TSMC, the world's largest contract manufacturer of chips. Nvidia said it would release its quarterly results as scheduled on November 17. Meanwhile, technology shares came under pressure Thursday as investors kept a nervous eye on AI giant Nvidia, whose influential boss Jensen Huang. Reports of another affair, between Huang and a senior Nvidia executive, piled on the pressure and reportedly prompted an emergency board meeting late Wednesday. Shares in Nvidia, which is due to report quarterly earnings next Tuesday, slid about six percent in pre-market trading. "A leadership scandal at one of the world's biggest companies is enough to bring the tech stock rally to a halt, and the Nasdaq is pointing to a lower open," said Kathleen Brooks, research director at trading group XTB.
She added that the Nvidia fallout was "helping to spur a rotation into European markets that are traditionally low-tech". London, Paris and Frankfurt all climbed in midday deals. Frankfurt's blue-chip DAX reached a record high above 27,000 points thanks to healthy corporate earnings and recent optimism about the artificial intelligence boom. Companies linked to the AI sector had enjoyed a healthy bounce in recent days after last week's sell-off sparked by regulatory concerns following the Democratic sweep of the US Congress.
Source: Qatar Tribune