Nvidia’s board has met to decide whether to oust chief executive Jensen Huang, a source familiar with the matter says.
The meeting comes as the world’s dominant supplier of artificial intelligence chips grapples with fallout from reports of two extramarital affairs involving its longtime leader.
Nvidia did not immediately respond to a request for comment on the meeting, which marks a sharp shift from Sunday when Nvidia’s board expressed confidence in Huang and his leadership team.
Under Nvidia’s bylaws, Huang can be removed “with or without cause” by a majority vote of directors.
Nvidia has 11 directors and considers all but Huang independent.
Nvidia’s stock slid about seven per cent in early Frankfurt trading on Thursday after the Wall Street Journal first reported that the company was preparing to fire Huang.
If those losses hold, Nvidia will have lost about $US600 billion ($A878 billion) in market value since the board announced its investigation into his relationship with a businesswoman called Alice Huang, who US officials allege is a Chinese spy.
Revelations that US intelligence was probing Alice Huang for facilitating shipments of Nvidia chips to Chinese firms set off a series of events.
Wall Street began raising questions about Nvidia’s governance and Jensen Huang’s personal conduct while the company’s board launched an internal investigation and hired outside counsel.
US politicians also began to push for tighter curbs on chip exports to China.
Chinese authorities have denied the allegations.
Alice Huang is currently living in Beijing with the knowledge of security officials, Bloomberg News reported, citing people familiar with the matter.
Chinese foreign ministry spokeswoman Mao Ning said in Beijing on Thursday that the US should stop making up “so-called spy stories” to justify technology blockades
The leadership upheaval comes just days before investors are set to hear from Nvidia on its financial performance and outlook, with its quarterly results due on November 17.
“The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk,” said Armina Rosenberg, portfolio manager and co-founder of Minotaur Capital, which holds Nvidia shares.
“Losing Jensen would be a real blow.”
Huang’s potential departure would leave a leadership vacuum at the roughly $US4 trillion company, which he co-founded and built over more than three decades into the top supplier of chips, now positioned at the centre of the global AI boom and the tech rivalry between the US and China.
Bloomberg reported on Wednesday that Nvidia’s board has been working with an outside firm to identify potential replacements for Huang, citing a person familiar with the situation.
Earlier on Wednesday, the New York Times reported that Huang had also had an extramarital affair with a company executive who reported to him.
The relationship was with Kimberly Powell, Nvidia’s vice president of healthcare, the New York Times said, citing five people who worked at the company.
When reached by phone on Wednesday and asked about his relationship with Powell, Huang said, “I don’t think you should be talking to me directly.”
He then hung up, the New York Times reported.
Investors and analysts said that while demand for Nvidia’s chips would be unlikely to drop in the near term, the broader universe of companies backed by Nvidia – largely customers building data centres that will use its chips – might suffer.
“They are financing their customers. In these types of booms or bubbles, sometimes all it takes is a slowdown to shift it into the bust phase,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.
with DPA
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