Nvidia CEO Jensen Huang resigns amid affairs scandal and Congressional scrutiny
Nvidia CEO, Jensen Huang, resigns
Its the end of an era for Nvidia and its key leader in the AI race. CEO Jensen Huang has resigned, four days after admitting to an affair with a suspected Chinese Spy. Since then there have been reports of two more affairs, both with Nvidia employees. The scandal now raises questions about a lack of internal and external oversight, with members of Congress calling for Huang to testify on Capitol Hill.
SANTA CLARA, Calif. - Jensen Huang, resigned Thursday as CEO of Nvidia, the AI chip making company he founded back in 1993.
The announcement from Nvidia headquarters in Santa Clara was posted on the company's website and stated in part:
"Jensen Huang has resigned as President, Chief Executive Officer, and a member of the Board, effective immediately...The Board and the company thank Jensen for his immeasurable contributions to the company and the industry."
Third affair reported Thursday
Huang has become a prominent face, not just of NVIDIA, but the growing A-I sector.
Pressure mounted this week after reports in a New York Times investigation that Huang had multiple extra-marital affairs with a Chinese business executive, Alice Huang, known as Huang Le, who was buying up Nvidia chips and was accused of being a spy for China.
The New York Times reported a second alleged affair with an Nvidia executive, Kimberly Powell, who is listed on the company's website as the Vice President of Healthcare and an employee since 2008.
Reuters on Thursday reported several sources said Huang had a third affair with another Nvidia employee.
The affairs have raised big questions about oversight and security inside and outside the Silicon Valley company.
Nvidia corporate structure and board oversight
Santa Clara University's Jo-Ellen Pozner, Associate Professor at the Leavey School of Business, has studied Nvidia's leadership and structure.
Pozner says Nvidia's unusual flat corporate structure and board composition seemed to give Huang expansive control over the company without internal oversight.
"I think that this was probably widely known within Nvidia already, or at least within some circles within Nvidia. And my interpretation is that it was released so that the board would have an excuse to get rid of him," Pozner said.
Pozner says the appointment of Colette Kress, the Chief Financial Officer, as interim CEO and CFO is a good move.
"She has a direct relationship with the board as CFO. She would be reporting directly to the board, so she's a known quantity to that team. And there are probably few other top executives at Nvidia who have that amount of visibility," Pozner said.
Nvidia also announced its first-ever board chair, Harvey Jones.
"The fact that the board didn't have a chair for 33 years is really unusual, and it suggests that Jensen really had been in control of the board as well as the company itself," Pozner stated, adding that 4 of the 10 board members had been there since Nvidia's founding in 1993, raising questions about whether they were able to still act independently when the typical company's average board tenure is about 10 years.
Congressional investigation
Pozner says Huang's connection to the Trump administration also raises questions about the U.S. government's oversight role in security matters, with the sensitive competition over A-I chip supplies and development.
"It's very complicated though, because Nvidia has also given the White House a fraction of the revenue on all of its sales to China already. So there's a lot of entanglement between Washington and Nvidia," Pozner noted.
In Washington D.C., Republicans and Democrats are calling for an investigation into Huang's actions.
"Our goal is to get him in as soon as possible so we have a full understanding of the facts," John Moolenaar (R-Michigan) stated.
San Francisco Congressman-elect Scott Wiener stated Thursday, "Congress needs to fully investigate Mr. Huang’s actions, including his apparent lobbying of the President to authorize advanced chip sales to our top global rival, China."
What's next?
Nvidia's interim CEO/CFO Colette Kress is scheduled to face investors at a third-quarter financial reporting call on Tuesday, November 17th at 2:00 PM PST.