NEW YORK TIMES: Nvidia boss Jensen Huang quits as Chinese spy scandal compounded by second affair revelation

Jensen Huang, Nvidia’s CEO, resigned on Thursday (local time) after revelations that he had an affair with an executive who reported to him as well as with a woman whom US officials had identified as a Chinese spy.

The chip company’s 10-member board met for several hours on Wednesday evening and agreed to name Colette Kress, the company’s chief financial officer, as interim CEO, until a permanent successor has been named. The board said that it would begin a search for a permanent replacement and would consider internal and external candidates.

Nvidia also appointed Harvey Jones, a longtime tech entrepreneur and investor, as the chip company’s chair. In a statement, Mr Jones said that the board was confident in Ms Kress and the executive team and that it expected “the company’s operations, customer commitments and product road map to continue without interruption.”

Mr Huang’s exit opens an uncertain chapter for Nvidia, the premier maker of artificial intelligence chips, and will have widespread ripple effects. The Silicon Valley firm is a linchpin of the AI boom and one of the world’s most valuable public companies, controlling an estimated 90 per cent of the market for the computer chips used in the big AI projects that are driving the US economy. Its stock price had skyrocketed since 2023, but had lost a third of its value as reports of his affairs began surfacing last month. The price fell another 4.3 per cent Thursday after Mr Huang’s resignation.

Nvidia’s dominance has made Mr Huang one of the world’s wealthiest people, as well as an ally of Donald Trump. The US President was previously informed about Mr Huang’s relationship with the woman believed to be a Chinese intelligence asset but took no action. He has defended Mr Huang over the past week, saying he was an “honourable man” who did not know the woman was a Chinese agent. The President praised him again after he resigned, saying Mr Huang had done a “fantastic job”.

Few Silicon Valley executives — with the possible exception of Elon Musk of Tesla and SpaceX, and Steve Jobs of Apple — have been as synonymous with their companies as Mr Huang, 63. He was a founder of Nvidia in 1993. He managed all aspects of its business as CEO, and his family members have steadily risen through the company’s ranks. With a 3.56 per cent stake, he is also Nvidia’s largest individual shareholder. He has had such a tight grip on the company that there is no clear successor.

“Jensen is very much the command and control,” said Patrick Moorhead, the founder of Moor Insights & Strategy, a technology research firm. “Just like nobody replaced Steve Jobs and ran the company like him, nobody can replace Jensen. There has to be a different operating system.”

Mr Huang was fighting hard to hang onto his role leading the company, according to several people briefed on the discussions. But an interim plan for Ms Kress take over Nvidia was well underway on Wednesday.

Any fallout may widen because Nvidia has also pumped money into AI startups, cloud companies, data centres and other chip suppliers. With Mr Huang as the ringleader, the company spread its tentacles across the AI industry and put itself at the epicentre.

Public scrutiny of Mr Huang began after The New York Times first reported last month that US intelligence agencies had discovered that he had developed a close relationship with a Chinese citizen and chip buyer, who US officials concluded was gathering intelligence for Beijing.

The chip buyer was Alice Huang or Huang Le, whose biography said she worked in China as a TV reporter before becoming a top executive at a Singapore-based data centre company called Megaspeed that had become one of Nvidia’s biggest customers in Southeast Asia. Megaspeed has bought more than $US4.8 billion in chips since June 2024.

The relationship raised questions of US national security, given that the US government had barred Chinese companies from buying the advanced chips. It also stoked geopolitical concerns as the United States and China compete for dominance in AI.

China has denied the espionage claims. Alice Huang has not responded to requests for comment.

Jensen Huang was one of the strongest voices, lobbying personally at the White House, for relaxing export restrictions on American chips. With Democrats taking the majority of Congress, there will be great pressure on the Commerce Department to enforce rules and to tighten sales bans to China.

Senator Elizabeth Warren of Massachusetts, the top Democrat on the chamber’s banking panel, said that Mr Huang’s resignation “does not absolve him, other executives, or the company as a whole of responsibility for putting our national security at risk or for any potential violations of our laws”.

In a statement, she said the company still would “owe Congress answers,” while demanding the same of the Trump administration.

Nvidia’s board had largely been supportive of Mr Huang, who is also on the board. The other members include outside executives and the company’s early investors and longtime partners.

But after The Financial Times reported last week that Jensen Huang’s relationship with Alice Huang was romantic, Nvidia’s board said Sunday that it was opening an investigation into his conduct. It hired the law firm Wachtell, Lipton, Rosen & Katz to help lead its investigation.

That same day, Mr Huang admitted that he had been unfaithful to his wife, Lori Huang, to whom he has been married for 41 years. He apologised for his behaviour.

“My family bears no responsibility for my choices — I do,” he said in a message to Nvidia employees. “Please give them privacy.” His two children, Madison and Spencer, also work at the company.

Mr Huang’s acknowledgement of the affair and the company’s investigation set off a firestorm. The drop in Nvidia’s share price since the start of October has wiped out more than $US1.5 trillion in market value.

On Wednesday (local time), the New York Times reported that Mr Huang also had an extramarital relationship with Kimberly Powell, an Nvidia vice president who reports to him. Under Nvidia’s code of conduct, employees are told to “avoid situations where our actions create conflict” including “personal relationships,” and the company says that it “promptly investigates reports of misconduct”. Many corporations have policies prohibiting managers from having relationships with subordinates.

Mr Huang and Ms Powell, 48, were captured on video being affectionate at a San Jose, California, hotel during an Nvidia conference in March. Ms Powell, who is married, has not responded to requests for comment.

After the Times approached Nvidia on Wednesday about the second affair, the board began deliberating about Mr Huang’s future at the company.

Ms Kress is an Nvidia veteran who joined the company 13 years ago. She previously worked at Microsoft and Cisco. In a note to employees Thursday, she said she believed “deeply in this company” and each of its employees.

“This company has achieved so much because of the work that all of you bring to it every single day,” Ms Kress said. “You are our greatest strength.” She announced a company meeting on Wednesday to discuss its future.

Nvidia reports its next quarterly earnings Tuesday.