Here's the latest
• The Nvidia board is meeting to discuss the future of embattled CEO Jensen Huang, two sources told CNN. There was some expectation among Trump administration insiders that he would be ousted, they said.
The meeting comes amid news reports about Huang’s extramarital relationships, including one with a woman believed to be a Chinese spy. Nvidia shares have fallen sharply in after-hours trading. Huang on Sunday apologized for an extramarital affair, although he did not name the other party.
• Wall Street analysts are now questioning who could replace the Nvidia CEO, since the company has no clear, public succession plan in place.
• Nvidia represents a major engine of US economic growth and has powered the AI boom that has driven much of the stock market’s recent gains.
Updates
(10)Nvidia’s advantage in the AI chip race
Under Jensen Huang’s leadership, Nvidia was early to bet that graphics processing units – chips that were primarily used for processing video game graphics – would be critical for training AI models.
Nvidia now offers all the pieces needed for AI computing, including full packages for data centers that provide networking chips and software platforms that allow developers to tailor their code so that their apps can run more efficiently on Nvidia’s hardware.
That can make it difficult for longtime customers to switch to different chips and technology providers.
“If you look at the magnitude of Nvidia’s offerings, nobody really can touch them,” Ted Mortonson, technology desk sector strategist at Baird, told CNN last year.
The "key man" risk is not unique to Nvidia
Nvidia’s over $4 trillion market value rests largely in part thanks to Jensen Huang, a key figure in the AI trade from the White House to Wall Street.
But in the middle of a stunning scandal, Nvidia’s close link to its sole CEO highlights a major vulnerability in the AI ecosystem: the “key man risk.”
Nvidia is not the only company with this set-up.
- Both Tesla and SpaceX revolve around CEO Elon Musk, the richest person in the world.
- OpenAI is almost synonymous with Sam Altman, its mercurial CEO.
- Meta co-founder Mark Zuckerberg’s fingerprints are all over virtually every major move made by the Facebook and Instagram owner, another major AI player.
- And Anthropic CEO and co-founder Dario Amodei’s doomsday warnings about AI safety have made him the face of the AI lab as it attempts to pull off a $1.5 trillion IPO.
CNN’s Ramishah Maruf contributed to this report.
Lack of clear succession plan raises questions about who could replace Huang
Nvidia CEO Jensen Huang has been synonymous with the company he founded 33 years ago and famously doesn’t believe in succession planning.
That could put his board in a tricky position as it meets to discuss his possible ouster.
“Our company was built so that I know how to run it,” he told Bloomberg in 2023. “So for as long as I’m running it, that’s all that matters.”
He expanded on that philosophy in a podcast interview with Lex Fridman earlier this year, saying that it’s not because he thinks he’s “immortal” but because he believes it’s best to prepare everyone at the company with the skills and information needed to lead. He added that he hopes he “dies on the job.”
Nvidia’s unusual corporate structure — with Huang famously having around 60 direct reports — does not lend itself to providing a clear No. 2 that would be an obvious choice to take over for the chief executive.
“It’s very unusual, I think, not to have a formal succession plan developed by the board in conjunction with the CEO,” David Larcker, director of the Corporate Governance Research Initiative at Stanford Graduate School of Business, told CNN.
Still, he added, the board may have had little incentive to challenge Huang’s opposition to succession planning amid the meteoric rise of the company’s stock in recent years.
Larcker said that “virtually every company that’s well governed is going to have an emergency candidate,” and that specific details are often considered proprietary information. Nvidia, however, has shared less information about its planning with investors than other big tech companies.
Nvidia’s latest proxy statement mentions “succession planning” only once — compared to around a dozen times in Google and Apple’s most recent reports — in a risk disclosure noting the company is “highly dependent on the services of our longstanding executive team.”
Nvidia board is meeting to discuss CEO Jensen Huang’s future
The Nvidia board is meeting Wednesday night to discuss the future of embattled CEO Jensen Huang, two sources familiar with the matter told CNN.
There was some expectation among Trump administration insiders that he would be ousted, the sources said.
The news was first reported by the Wall Street Journal. It comes amid news reports about Huang’s extramarital relationships, including one with a woman believed to be a Chinese spy.
An overview of Nvidia's whirlwind week
Sunday, November 8: Nvidia’s board announced it would investigate whether CEO Jensen Huang was the target of a “foreign intelligence effort,” following reports that he had a romantic relationship with a woman US officials believe to be a Chinese spy. On the same day, Huang admitted to and apologized for having an extramarital affair, although he did not name the other party. The board expressed confidence in Huang and said it did not believe US national security or company secrets had been compromised.
Monday, November 9: President Donald Trump said the FBI was looking into the matter and that he had spoken to Huang about it. “He said he had absolutely no idea that the person in question was a spy… and I really believe him,” Trump said. Meanwhile, federal lawmakers called for inquiries into the incident or new legislation to restrict foreign chip sales.
Tuesday, November 10: Nvidia’s board retained law firm Wachtell, Lipton, Rosen & Katz to lead its investigation into Huang. A source familiar with the matter also told CNN that Secretary of State Marco Rubio briefed Trump on intelligence that Huang was in a relationship with a potential Chinese spy in May, as they traveled to China aboard Air Force One.
Wednesday, November 11: The New York Times reported that Huang had a separate extramarital relationship with an executive who reports to him. Shortly after, the board convened to discuss his future at the company.
Nvidia stock drops as board reportedly weighs Huang’s future
Nvidia shares dropped sharply in after-hours trading on Wednesday after reports that CEO Jensen Huang had an extramarital relationship with a company executive and that the board is meeting to discuss his future.
Nvidia shares (NVDA) fell 8.4% as of 6 p.m. ET as investors digested the developments.
Shares fell after The New York Times reported Huang had an extramarital relationship with an Nvidia executive, and the Wall Street Journal subsequently reported the Nvidia board is preparing to oust Huang, who co-founded the company three decades ago.
Nvidia did not immediately respond to requests for comment about the new reports.
Days earlier, Nvidia’s board said it would investigate whether Huang was the “target of a foreign intelligence effort” amid reports that he had a separate relationship with a woman US officials believe to be a Chinese spy. Huang on Sunday apologized for an extramarital affair, although he did not name the other party.
Investors are weighing the outlook for the chipmaker that’s been at the center of the AI boom if Huang is ousted from his role. The CEO has been one of AI’s most steadfast cheerleaders, and investors have flocked to Nvidia shares because of his vision for the tech boom.
Nvidia shares dropped 9.5% across Monday and Tuesday after Huang’s weekend admission of extramarital affair and news of the Nvidia board’s investigation.
"I really believe in him": Trump vouches for Huang amid scandal
President Donald Trump has defended embattled Jensen Huang as the Nvidia CEO began facing investigations over his affair with an alleged Chinese spy.
Trump said he spoke with Huang earlier in the week and told him, “I had no idea that she was a spy,” the president told reporters.
“I really believe him,” Trump told reporters during the impromptu White House press conference on Monday. “I think that he’ll be in good shape.”
Trump has not issued fresh comments on Huang since reports of a second alleged extramarital affair, with an Nvidia executive surfaced Wednesday evening.
Nvidia exec reported to have had affair with Huang drops out of Thursday conference
Kimberly Powell, vice president of healthcare at Nvidia, has canceled a planned appearance Thursday at a conference in Washington, DC.
Powell had been set to speak at the opening session of the Milken Future of Health Summit on a panel moderated by CNN.
The New York Times reported late Wednesday that Nvidia CEO Jensen Huang had an extramarital relationship with an Nvidia executive, naming Powell and noting that Huang and his colleague “were captured on video being affectionate at a San Jose, Calif., hotel” during an Nvidia event in March.
Conference organizers told CNN Wednesday evening she would no longer be attending.
Nvidia started as a company with an eye on gaming, not AI
Nvidia today is practically synonymous with AI, but the technology was hardly on the minds of its founders when they launched the company over 30 years ago.
Their discussions instead revolved around finding a way to boost the processing capabilities of computers, especially graphics-intensive applications, embattled CEO Jensen Huang previously shared.
That was the impetus for Nvidia entering the graphics processing unit, or GPU, space in 1999. (While Nvidia popularized the term, it didn’t invent it, though it is often mistakenly credited with having done so.)
Nvidia’s GPUs revolutionized the gaming industry, bringing to market new games with movie-like visuals. Games previously were in 2-D.
Eventually, the company took things one step further, creating a programming language that enabled developers to create applications to run on its hardware. By 2012, Nvidia discovered that its chips could be used to power much more than video games.
Chief among those: artificial intelligence applications.
