Joon Kim will lead the inquiry as Nvidia gives no timetable
Nvidia has appointed New York-based Wachtell, Lipton, Rosen & Katz to conduct what the chipmaker called a “thorough and independent” investigation into chief executive Jensen Huang’s relationship with Alice Huang. The Guardian reported that Huang was an alleged Chinese spy, an Nvidia customer and no relation to Jensen Huang. Wachtell partner Joon Kim, a former government prosecutor in New York, will lead the inquiry; Nvidia has given no timetable. The company said Jensen Huang would continue to lead the business he co-founded “without interruption.”
The move follows reports that Jensen Huang had been having an affair with Alice Huang. Nvidia initially denied an improper relationship with the Chinese citizen. Huang then admitted on Sunday that he had been unfaithful to his wife, without referring directly to Alice Huang. On the same day, Nvidia announced an investigation into reports that Jensen Huang “has been the target of a foreign intelligence effort.”
The Guardian described Nvidia as a $4.1tn (£3tn) chipmaker and said the scandal had wiped $430bn from its value as shareholders weighed the potential impact on a company and executive synonymous with the AI boom.
U.S. ambassador to China David Perdue said, “The situation with Nvidia is another reminder that we have to stay diligent. National security is part of this economic conversation because economic security is national security. And so, what we’re doing with China is bumpy right now.” He told Bloomberg Television.
The Guardian described Wachtell as one of the most prestigious corporate law firms in the US. Its website describes Kim as a specialist in internal investigations, white-collar criminal and regulatory defence, and crisis management. The firm’s founding partner, Martin Lipton, invented the “poison pill defence” in the 1980s, a corporate gambit formally called the “shareholder rights plan.”
The shareholder rights plan allowed investors to buy more shares at a discount if one shareholder acquired a certain percentage of the company’s stock, making it harder for corporate raiders to acquire a company without the board’s approval. Wachtell was closely involved in the takeover of Getty Oil by Texaco. It was the largest corporate takeover in history at the time, although it turned sour when the thwarted suitor Pennzoil sued Texaco and won.
In 2008, a team of Wachtell lawyers advised the US Treasury department on the takeover of Fannie Mae and Freddie Mac during the financial crisis. The firm, founded in the 1960s, has been described as the most profitable law firm in the US. According to the Am Law 100 rankings, it pulled in revenues of $5.1m per lawyer last year and made profits of $12m per partner, the highest profits per partner ever.
From 2017 to 2018, Kim was the acting US attorney for the southern district of New York, where he ran a team of lawyers investigating securities and commodities fraud, mail and wire fraud, public and private corruption, money laundering, cybercrime, and tax offences.
That work included the case of former US representative Anthony Weiner, who was sentenced to 21 months in prison for sending obscene material to a minor. Kim also oversaw the prosecution of banker Mehmet Hakan Atilla, who was convicted in 2017 of helping to evade US sanctions on Iran. Another high-profile assignment came in 2021, when Kim investigated multiple allegations of sexual harassment by then New York governor Andrew Cuomo.
In a note to investors, tech analyst Dan Ives wrote, “Right now the Street and investor chatter is assigning roughly a 15% chance he is removed as CEO of Nvidia with a high probability (85%) he stays on as CEO after the board investigation is completed.” He added, “We would expect a board investigation that could take four weeks to six weeks and will create a clear overhang on the stock until more news emerges from Nvidia.”
Ives’s projected timetable was not a company deadline; Nvidia had not given one. Jeffrey Sonnenfeld, senior associate dean for leadership studies at the Yale School of Management and founder of the Chief Executive Leadership Institute, put Huang’s survival chances at “about 50-50.”