Nvidia CEO Jensen Huang resigns amid Chinese spy affair scandal

Nvidia CEO and co-founder Jensen Huang resigned on Thursday after a week of revelations about alleged extramarital affairs, including one with an alleged Chinese spy.

The snowballing scandal sent shares in the AI chip giant tumbling into an eight-month low, wiping hundreds of billions of dollars off its market value as security concerns continue to grow.

Nvidia confirmed Huang’s resignation on Thursday, and confirmed that CFO Colette Kress will temporarily hold the position him while the company searches for a permanent replacement.

Huang co-founded Nvidia in 1993 as a graphics chip provider for video games, growing into one of the world’s most profitable companies by producing chips for leading AI companies.

The decision followed an investigation launched by Nvidia’s board into Huang’s relationship with Alice Huan, a former executive at Megaspeed International, a data centre company in Singapore.

US intelligence officers suspect that Alice Huang was recruited by China’s Ministry of state Security to collect information about the former Nvidia CEO while influencing him to export AI chips to Chinese companies. The FBI eventually began investigating the relationship.

Huang initially held his position as the investigation progressed, but publicly confirmed that he had been cheating on his wife while affirming that he intends to cooperate with the investigation.

However, the scandal only got worse on Wednesday when the New York Times reported that Huang had also been involved in a second affair with Kimberly Powell, Nvidia’s vice president of healthcare, who directly reports to him.

The affair goes against Nvidia’s code of conduct which prohibits employees from “situations where our actions might create a conflict—actual or potential—between our personal gain and our obligations” to the company.

Reports consequently began to emerge that Nvidia’s board was considering removing Huang, before the company confirmed his resignation on Thursday.

This led company shares to fall even further, by as much as 10% in premarket trading. Nvidia had already lost around $300 billion since announcing the investigation into their then-CEO and the alleged Chinese spy.

The impact extended beyond just Nvidia, dragging down with it several AI-related companies while rival companies AMD and Broadcom continue to profit from the scandal.