Nvidia's board of directors met Wednesday to decide whether to oust CEO Jensen Huang, after The New York Times reported a second extramarital affair involving an executive who reports to him, according to CNBC, The Guardian, The Verge, TechCrunch and SiliconANGLE.

The newly reported relationship involves Kimberly Powell, Nvidia's vice president of healthcare, according to the Times, as cited by all five outlets. Powell and Huang, both married to other people, were allegedly seen showing affection toward each other at a hotel in San Jose, California, during the company's GTC developer conference in March, according to two unnamed sources cited by the Times.

Nvidia shares fell between 7% and 9% in after-hours trading Wednesday, after The Wall Street Journal reported the board was preparing to remove Huang, according to CNBC, The Guardian, TechCrunch and The Verge. The exact figure differs by outlet because each recorded the price at a different point in the session.

Analysts are already treating Huang's departure as a likely outcome rather than a remote possibility, according to The Guardian. "The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk," Armina Rosenberg, a portfolio manager and co-founder of Minotaur Capital, which holds Nvidia shares, told the outlet. Tech analyst Dan Ives told The Guardian the company "likely now has to move on without Jensen at the helm."

What came before

This is the second blow to hit Huang within days. He had admitted in a letter to employees the previous Sunday that he had been unfaithful to his wife with Alice Huang, a woman U.S. officials suspect of being a Chinese spy — an admission that had already sent Nvidia shares falling, as Cortexplor <a href="https://cortexplor.com/en/nvidia-shares-fall-jensen-huang-affair/">reported</a> at the time. That same Sunday, Nvidia's board opened an independent internal investigation, hiring the law firm Wachtell, Lipton, Rosen & Katz, as Cortexplor also <a href="https://cortexplor.com/en/nvidia-board-investigation-jensen-huang-china-spy/">covered</a>. As of Wednesday, that firm was still advising Huang to remain in charge while the inquiry continued, according to The Guardian.

Huang has no clear successor. According to TechCrunch, he has about 60 direct reports — an unusually flat management structure for a company of Nvidia's size — and the company is already working with an outside firm to identify possible replacements, according to Bloomberg, as cited by TechCrunch. The Guardian notes Nvidia's 11-member board considers every director but Huang independent, and that company bylaws allow him to be removed "with or without cause" by a majority vote.

Huang personally holds about 870 million Nvidia shares, or roughly 3.6% of the company, making him the world's 13th-richest person, according to Bloomberg figures cited by The Guardian. Most of his shares, however, sit in trusts he controls jointly with his wife, Lori Huang — about 800 million shares — which CNBC reports limits his direct economic control over the company.

In practice

  • What's new: Nvidia's board met to decide whether to remove Huang after a second affair was reported, this time involving a company executive, according to CNBC, The Guardian, The Verge, TechCrunch and SiliconANGLE.
  • When: the board meeting happened on Wednesday; shares fell between 7% and 9% in the same after-hours session, according to the same sources.
  • Who's affected: Nvidia, Huang, executive Kimberly Powell, and the broader AI chip market — the company is valued at more than $4 trillion, according to The Guardian.
  • What was already known: Huang had admitted a first affair, with a woman suspected of being a Chinese spy, the previous Sunday, and the board had already opened an internal investigation, as Cortexplor reported.
  • What's missing: Nvidia had not announced a decision on Huang's future as of this story's publication.