EXPLAINED | Nvidia Shares Plunge. Can Its Board Fire Jensen Huang?

Nvidia’s board was meeting on Wednesday in the US to decide whether to remove co-founder and chief executive Jensen Huang, Reuters reported, citing a person familiar with the matter. Earlier that day, The New York Times reported that Huang had an affair with an Nvidia executive who reported directly to him. The report landed three days after Nvidia opened an inquiry into whether a foreign intelligence operation had targeted him. As of Thursday morning in India, Nvidia had announced no change in leadership.

Can Nvidia’s board fire its founder?

Yes. Nvidia’s bylaws allow a majority of its directors to vote to remove a company officer, including its CEO. Huang has a seat on the board and owns about 3.6% of Nvidia’s shares. His stake gives him a voice as a shareholder. The decision about his job belongs to the board. Directors can also fill a vacancy, so they could appoint someone to run Nvidia while they look for a permanent CEO.

What did the new report allege?

The New York Times, citing five people who had worked at Nvidia, reported an extramarital relationship between Huang and Kimberly Powell, Nvidia’s vice president of healthcare. Her team develops uses for Nvidia’s technology in fields such as medical imaging and drug discovery. She reported directly to Huang, according to the Times. That reporting line matters because a boss can influence a subordinate’s pay, promotions and assignments. It raises a workplace question for Nvidia’s directors. They can ask who made those decisions and whether anyone disclosed a conflict.

What has Huang admitted, and what is Nvidia investigating?

On November 8, Huang told employees he had been unfaithful to his wife and apologised to her and their children. He did not name anyone in that email. That day, Nvidia’s board said independent directors would investigate reports that a foreign intelligence operation had targeted him. It expressed confidence in Huang and said it had no reason at that point to believe US national security or Nvidia’s secrets had been compromised. On November 10, the directors hired former acting US attorney Joon H. Kim and his law firm to conduct the inquiry. Nvidia has yet to say publicly whether its scope now includes the Powell allegation.

Who is Alice Huang, and why is the FBI involved?

Alice Huang, also known as Huang Le, is a Chinese businesswoman who held a senior role at Megaspeed, a Singapore-based company that bought Nvidia chips. She and Jensen Huang are unrelated. The New York Times reported that US officials believed she had provided information to Chinese intelligence. China’s foreign ministry rejected the allegation. It remains unclear what information, if any, reached Beijing.

Megaspeed has also faced US scrutiny over suspected diversion of restricted Nvidia chips to China. The Information reported that Alice Huang helped move at least $7.5 billion worth of Nvidia chips into China. Reuters said it could not independently verify that report. The FBI is separately examining whether a foreign intelligence operation targeted Jensen Huang, Reuters reported. President Donald Trump said on November 9 that he had spoken with Huang, who told him he had been unaware of the alleged intelligence ties.

Why did Nvidia shares fall so sharply?

The timing tells the story. Nvidia ended Wednesday’s regular US session at $173.73, up about 3%. Its market capitalisation, the combined value of all its shares, was about $4.2 trillion. That put it second globally behind Apple and ahead of Microsoft, which Reuters had reported briefly overtaking Nvidia on Tuesday.

Then came the reports about Huang’s future. Nvidia traded near $160 after the closing bell, about 8% below its closing price. Including that after-hours drop, Reuters estimated the company had lost roughly $600 billion in market value since the inquiry was announced. Investors were putting a lower price on the same business as they weighed who might run it and how its strategy could change.

Why is Huang so hard to replace?

The Taiwan-born engineer co-founded Nvidia in 1993 with Chris Malachowsky and Curtis Priem. Its early chips drew graphics for video games by doing many calculations at once. The same ability made them useful for training AI. Nvidia built software called CUDA that let developers use the chips for those calculations. That combination helped make Nvidia a central supplier to the AI industry and put Huang in the middle of US decisions about which chips could be sold to China. Dozens of executives report directly to him.

Who could run Nvidia if Huang goes?

Nvidia has named no successor. The BBC raised Malachowsky as a possibility. He has led Nvidia’s product engineering and remains a senior technology executive. Nvidia’s public filings warn that a poorly managed handover could hurt the business. Huang himself told podcaster Lex Fridman in March that he did not believe in succession planning, explaining that he preferred to share what he knew with his team as he went. The details of any current board plan are private.

The directors could make a temporary appointment first. When Intel CEO Pat Gelsinger left in 2024, the chipmaker put its finance chief and the head of its product business in charge while it searched for a permanent CEO.

Could this affect India’s access to Nvidia chips?

India’s government-backed IndiaAI portal lists Nvidia H200 and B200 machines that eligible startups and researchers can rent by the hour. They can train AI models without buying their own servers. Nvidia has announced no change to its Indian supplies tied to the inquiry. For these users, a delay in deliveries or a change in rental prices would have a more direct impact than the share-price fall.

When will investors and lawmakers hear from Nvidia?

Nvidia has scheduled its earnings call for November 17 in the US, early November 18 in India. That is the next scheduled chance for investors to hear management explain what the turmoil means for the business. Three US House committee chairs have asked Huang to brief them behind closed doors on November 18. Reuters reported on November 11 that they wanted Huang to appear himself and were considering a subpoena, a formal order to appear, if he did not agree to a date. Separately, shareholders have filed a lawsuit alleging Nvidia and Huang misled investors about the risks of his alleged ties to Alice Huang. The court has yet to rule on those claims.