Nvidia's board is reportedly seeking to remove CEO Jensen Huang. A board meeting could be held as early as the 11th (local time).
The trigger is said to be fresh allegations of an affair between Huang and an executive at the company. The board is reportedly taking issue with allegations that Huang, a co-founder, had two extramarital relationships. It was also claimed that one of the partners was a woman suspected of being a Chinese spy.
The stock price wobbled right away. Nvidia shares fell more than 8% in after-hours trading as of 5:45 p.m. (local time) on the 11th. The controversy over the private life of the head of the company leading the AI chip market appeared to weigh on investor sentiment. The market is seen as having reacted sensitively because the allegations involve the founder and CEO, who is the face of the company.
The person named as the other party in the additional allegations is Vice President Kimberly Powell. Powell oversees Nvidia's healthcare business. However, these are only allegations that have been raised. It has not been disclosed whether the parties acknowledged the relationship or how it continued.
Powell is a senior executive who oversees the company's global healthcare business. According to the biography on the company website, she is responsible for the global healthcare business, including hardware and software platforms for accelerated computing, AI and visualization technology. Image-based diagnosis, life sciences research, development of new therapeutics and analysis of medical information are cited as her key areas. It is a post that leads the entire business of applying Nvidia's chips and AI technology to the medical field. In effect, she holds a position that shapes the direction of the company's healthcare division.
Huang is 63 and Powell is 48. Both have spouses. Powell reports directly to Huang. Because the allegation is that the company's top decision-maker became personally entangled with an executive who reports directly to him, it could escalate into an issue of management morality and fairness in running the organization. The fact that both are married could also fuel the controversy.
Nvidia's code of conduct requires employees to avoid situations that could create conflicts of interest, including personal relationships. It also states a principle of promptly investigating when inappropriate conduct is reported. Not a few companies have rules restricting romantic relationships between managers and subordinates. How the allegations will be judged in light of such internal principles is also a matter of interest.
This share price decline is unusual in that it is tied not to earnings or chip supply issues but to allegations about the CEO's personal relationships. The fact that the other party in the allegations is a sitting vice president leading a core business is also magnifying the repercussions.
Nvidia has not yet issued an official statement. Neither Huang nor Powell has offered an explanation. As a result, the market's attention is focused on what conclusion the board will reach.