Jensen Huang resigns as Nvidia CEO amid affair disclosures

Nvidia names CFO Colette Kress interim chief executive and Harvey Jones chair

Nvidia chief executive Jensen Huang has resigned, a few days after confirming an extramarital affair with a Chinese executive regarded by US officials as a spy, according to the Guardian’s Nils Pratley. Nvidia named chief financial officer Colette Kress interim chief executive, and its shares fell 13% on the resignation before narrowing the decline to 5% within a couple of hours.

The executive, Alice Huang — no relation to Jensen Huang — is the Chinese head of Megaspeed, a Singapore-based firm suspected of smuggling Nvidia chips into China. Pratley wrote that an extramarital affair is not usually a resigning matter in itself, but that the circumstances here were different: in the “ultra-political” world of in-demand AI computer chips, the conflict of interest and the risk of landing Nvidia in national-security inquiries in Washington would have been obvious. The relationship, he argued, displayed “recklessness on top of mere unfaithfulness.”

Reports of a second affair, with a senior Nvidia employee, compounded matters, Pratley reported. US companies tend to be sensitive about such relationships, and he wrote that Nvidia’s directors might also have wondered what else could be revealed in the coming weeks. The first rule in such situations, he argued, is to get all the bad news out on day one.

The resignation arrives as congressional scrutiny of Nvidia’s China business builds. Democratic senators have asked administration officials to preserve all documents and communications related to the sale of Nvidia’s advanced AI chips to China. Pratley wrote that the issue at heart is wider than Nvidia — whether US officials have themselves jeopardized the country’s lead over China in AI — and that the company’s activities, and its ties to the Trump administration, will come under scrutiny like never before.

Nvidia’s shares fell 13% in the immediate reaction to the resignation. Pratley attributed the fall to investors who had believed the case pressed at the start of the week — that Huang was “irreplaceable” and that Nvidia would “melt” without the co-founder’s brilliance. He called that argument “nonsense,” writing that within days of the confession Huang looked less like a towering corporate titan and more like a political liability.

The stock pared its loss to 5% within a couple of hours as investors remembered that Nvidia still has the best and most in-demand graphics processing units in the world, and that many pioneering companies have prospered after the exit of an “irreplaceable” chief executive. Dan Ives, a senior tech analyst, said it was time to “rip off the Band-Aid and take Nvidia into its next chapter.”

Pratley set out three reasons the board was right to act. Congressional investigations will happen regardless, he argued, and Nvidia is better placed to defend itself without Huang in the top job. Huang’s personal lobbying clout on export policy, meanwhile, had evaporated: after the week’s revelations, Pratley wrote, Huang had no credibility as an advocate of looser restrictions, and the political demand will run entirely the other way, toward closing loopholes.

Third, Pratley wrote, is the issue Nvidia’s “underpowered” board has dodged for too long: over-reliance on one individual. Nobody doubts Huang’s commercial talents, he allowed, but even “godfathers of AI” in leather jackets don’t go on forever, and there is always danger in concentrating too much day-to-day power in one person’s hands.

Kress is well regarded on Wall Street, and Nvidia will not be short of outside applicants for the permanent job, Pratley wrote. The board has also answered criticism that a multitrillion-dollar company ought to have an independent chair by giving the role to Harvey Jones, a former chief executive of the semiconductor company Synopsys and a member of the current board. The next task, he argued, is creating proper governance checks and balances — work that may require fresh faces among the independent directors.

Pratley allowed that the management job ahead will not be easy, and that Nvidia will be different, not least because the political winds in the US have shifted. But there was no point, he concluded, trying to cling to a chief executive, however successful, who had made himself a “busted flush.” In his judgment, Huang had to go.