Concerns Over AI Projects Arise After Jeffrey Huang's Departure from NVIDIA in China

The board of directors of Nvidia Corp. is preparing to consider the possibility of firing CEO Jensen Huang amidst reports of his numerous extramarital relationships. As reported by the Wall Street Journal on Wednesday, members of the board familiar with the situation were scheduled to meet that day to decide Huang's fate at the company.

The situation escalated after Huang admitted on Sunday that he had an affair with Alice Huang, who was allegedly spying on behalf of China. This revelation highlighted Nvidia's lack of a succession plan for Huang and underscored how closely the 63-year-old CEO is tied to the company's success and operations.

Huang's potential departure will have a significant impact far beyond Nvidia's operations, not only because Nvidia is a leading producer of chips underpinning the AI boom. Huang has established himself as an experienced negotiator who utilized the company's extensive resources to invest in the AI supply chain and various startups. He is also a staunch advocate for the AI revolution, minimizing concerns about risks to humanity and emphasizing the benefits.

Furthermore, The New York Times previously reported on Wednesday that Huang was in a relationship with Kimberly Powell, Nvidia's Vice President of Healthcare. According to the Times, company employees recorded a video showing Huang and Powell being affectionate at a hotel in San Jose, California, during the Nvidia conference in March.

On Sunday, Huang admitted to an affair with Alice Huang, who worked at Megaspeed International—a Singapore-based firm that is a subsidiary of a Chinese gaming enterprise. This data center company, Nvidia's largest client in Southeast Asia, has been under US investigation for several months on suspicion of chip smuggling. Megaspeed and Nvidia deny any wrongdoing. Beijing has rejected accusations of espionage against Huang.

Following these news, Nvidia shares dropped 8% in extended trading, reaching $159.95 around 5:35 PM New York time, down from the closing price of $173.73 on Wednesday. Nvidia did not respond to requests for comment.

Nvidia CEO Jensen Huang has found himself at the center of a major scandal related to an alleged connection with a Chinese female spy. Nvidia has launched its own independent investigation into the matter. The repercussions of this incident have begun to affect the indicators of the American stock market.

The drop in Nvidia's shares led to a significant decrease in Jensen Huang's net worth. In the first 30 minutes of trading on Monday, his wealth decreased by $7.4 billion. As a result, he dropped two places in Forbes' list of the world's richest people, settling in tenth place.

The company's market capitalization also fell from $4.5 trillion on Friday to approximately $4.24 trillion. Because of this, Nvidia moved further away from Apple in the race for the world's most valuable companies.

According to a Forbes report, before Monday's trading began, Jensen Huang's total net worth was about $162.2 billion. However, after Nvidia's stock fell during the first half-hour period, his wealth decreased by $7.4 billion, amounting to $154.7 billion. When the market opened, the company's shares plummeted by more than 7 percent. At that moment, Jensen Huang's assets fell by approximately $10.3 billion, and he briefly dropped out of the top 10 richest people in the world, although his ranking later remained in tenth place. Following this decline, he ranked below Warren Buffett of Berkshire Hathaway and Larry Ellison of Oracle.

The primary reason cited for the fall in Nvidia's shares is the scandal involving CEO Jensen Huang. The company has initiated an inquiry into his alleged affair with a business associate and related accusations. American intelligence agencies suspect that a Chinese citizen named Alice Huang was gathering intelligence for Beijing, and that Jensen Huang had a close relationship with her. According to a report by The New York Times, American intelligence agencies informed President Donald Trump about this incident about a year ago, but no action was taken at the time. This information has brought the case back into discussion.

In a memo sent to employees, Jensen Huang admitted to being unfaithful to his wife, Lori Mills, and apologized, noting that his behavior had hurt his wife and children. He also supported the investigation launched by the company and promised to cooperate. Nevertheless, he did not mention Alice Huang, with whom the rumors of an affair surfaced. Jensen denied the accusations of espionage and violation of national security agreements.

Following the escalation of the dispute, Nvidia's board of directors formed a committee of independent directors and engaged external lawyers in the investigation. The company's board stated that it would review all available information on the matter. The company emphasized, however, that it had no basis to believe that a national security breach or leakage of confidential Nvidia information had occurred.

According to The New York Times report, Alice Huang is a Chinese citizen and is connected to the Singaporean company Megaspeed. She presented herself as the CEO of this company. Megaspeed conducts business related to Nvidia's technologies and computing services in the Asia-Pacific region. The report claims that China's highest intelligence agency placed Alice Huang with Jensen Huang to gather information. A joint photograph of both was published in June 2024. However, it is unclear when they first met or what the true nature of their relationship was. Previously, Megaspeed had also appeared in American investigations regarding China's access to Nvidia chip technologies. The report also raised many questions regarding the company's business and Alice Huang's role.

Amidst this scandal, US President Donald Trump defended Jensen Huang. When answering media questions on the matter, he called Jensen Huang a respected person and stated that he would like to take him on an upcoming trip to China. It should be noted that Jensen is part of President Trump's circle of technical advisors and colleagues. Trump stated that the Federal Bureau of Investigation (FBI) had started its investigation into the matter, and he believes Jensen Huang should not worry about it.

The coming week will also be important for Nvidia. The company will release its quarterly results after the close of trading on Tuesday. Furthermore, the second quarter results will indicate an 89% growth in the data center business.