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Summary

  • Nvidia’s board is considering removing Jensen Huang and shifting to an interim CEO structure, a move that could increase volatility across the global artificial intelligence (AI) ecosystem and in Nvidia’s share price.
  • Signs that at least $7.5 billion worth of Nvidia chips reached China and other destinations, combined with pressure from the U.S. Congress, are heightening regulatory risks tied to semiconductor export controls on China.
  • If a new management team reshapes the AI central bank, vendor financing structure and global semiconductor supply chain built by Jensen Huang, reduced financing for the AI industry and tighter regulation could become reality.

Forecast Trend Report by Period

Jensen Huang Out? AI Loses Its Captain

Biggest Crisis Yet for Nvidia’s 33-Year Rise

Additional Affair Allegation Emerges

Nvidia Board Moves Toward Dismissal

Interim CEO Structure Under Review

Eric Schmidt Among Names Floated as Successor

Jensen Huang, the chief executive officer who has led Nvidia for 33 years, is facing the risk of being forced out. His departure would shake the global artificial intelligence landscape.

Nvidia’s board held a video meeting on Nov. 11 to decide whether to remove Huang. In addition to Alice Huang, who is suspected of being a Chinese spy, Huang is reported to have had an inappropriate relationship with Kimberly Powell, Nvidia’s vice president for healthcare.

The board is reviewing a plan to install an interim CEO from inside the company while it searches for a permanent successor. Chief Financial Officer Colette Kress and Ian Buck, vice president for high-performance computing, are being discussed for the interim role. Names mentioned for the top job include former Google CEO Eric Schmidt, Apple Senior Vice President of Hardware Technologies Johny Srouji and Arm CEO Rene Haas.

Huang, a Taiwanese immigrant, founded Nvidia in 1993 and over 31 years built it into the world’s most valuable company by market capitalization. Under his leadership, the former gaming graphics-card maker became a giant in AI chips with a 90% market share.

But the string of scandals has threatened to erase that record. On Nov. 8, 10 days after his affair with Alice Huang was exposed, Jensen Huang admitted to an inappropriate relationship. The issue has gone beyond a personal scandal. At least $7.5 billion worth of Nvidia chips is reported to have reached China and other destinations through Alice Huang. That would make the head of America’s biggest AI-chip company the biggest loophole in U.S. semiconductor export controls on China.

The market is focused on the fallout for the AI ecosystem Huang built. Korean companies including Samsung Electronics and SK Hynix, which do business with Nvidia, would also be affected. Brian Colello, an analyst at Morningstar, said Huang’s exit from the center of the AI ecosystem could lead to less financing for the industry, tighter regulation and greater political backlash against AI. Nvidia shares rose 2.92% on the day, but slumped as much as 9% in after-hours trading after news of the board meeting emerged.

Even a Board That Said It Trusted Jensen Huang Has Turned as Internal Affairs and U.S. Political Pressure Mount

U.S. House China Panel Seeks His Appearance, Raising Risk the Issue Escalates Beyond Ethics Into Diplomacy

Tension ran high at Nvidia’s Santa Clara headquarters on Nov. 11 as Jensen Huang faced the threat of dismissal. When a reporter approached the Endeavor building, considered the heart of the company, three security guards ran out and blocked the way. Even on the Veterans Day holiday, some staff were on emergency duty. Employees declined to comment when asked about the situation.

Huang, who has led the company for 33 years since its founding, sits at the apex not only of Nvidia but of the global AI ecosystem. That is why the prospect of his departure has jolted not just Nvidia but also Big Tech and companies across its supply chain, including Samsung Electronics, SK Hynix, Micron and TSMC.

Removed With a Majority Vote, Regardless of Cause

The latest allegation of an affair accelerated the dismissal debate. The woman involved is Kimberly Powell, 48, vice president of healthcare and one of about 60 executives who report directly to Huang since joining the company in 2008. The allegation points to another inappropriate relationship beyond the one Huang had already acknowledged with Alice Huang.

During Nvidia’s annual GTC conference in March, Huang and Powell were seen showing affection at a hotel. A witness who recorded the scene on a mobile phone was asked by Huang’s security staff to sign a non-disclosure agreement. The board has added the matter to its agenda. Nvidia’s code of conduct requires employees to avoid situations, including personal relationships, that could create conflicts of interest.

The board’s stance changed within three days after saying on Nov. 8 that it trusted Huang’s leadership. Under Nvidia’s bylaws, the board can remove the CEO with a majority vote of directors, regardless of the reason.

The board appears to be mindful of pressure from Washington, where Democrats held the majority, and from investigative authorities. U.S. politicians have stepped up scrutiny of the relationship between Jensen Huang and Alice Huang. Senator Kevin Cramer, a Republican from North Dakota, and Representative Suhas Subramanyam, a Democrat from Virginia, said on Nov. 11 that Huang should resign according to his conscience. They cited concerns that information Alice Huang knows about him could be used for blackmail. The U.S. House committees on foreign affairs, intelligence and China have asked that Huang appear before Congress.

Will the ‘AI Central Bank’ Disappear?

Huang’s removal would not end as merely an internal company matter. He was the architect of a structure that circulated capital across the broader AI ecosystem. Under Huang, Nvidia acted as an “AI central bank,” channeling its huge cash flow back into the sector. It invested in developers of advanced AI models such as OpenAI and Anthropic, then built a vendor-financing structure that led them to buy Nvidia chips. It also backed neocloud companies that rent Nvidia graphics processing units to AI startups. A new management team could tighten financial controls and recalibrate some of those investments.

Nvidia’s role in steering the global semiconductor supply chain would also be difficult to replace. TF International Securities analyst Ming-Chi Kuo said Huang matters to Nvidia because he can turn technologies engineers deem feasible into actual products. His ability to outline the future of high-performance semiconductors and persuade power, network and memory companies to follow helped shape today’s AI-chip ecosystem.

Given how difficult Huang would be to replace completely, one option being discussed is to install him as board chair. That would remove him from the front lines while preserving his judgment and experience. Some have even raised the possibility that he could one day return, as Apple co-founder Steve Jobs did after being forced out and later coming back. Epic Games CEO Tim Sweeney said that if the board fires Huang, it would be as foolish as Apple firing Jobs and could cause serious damage to the U.S.

Kim In-yeop, Korea Economic Daily correspondent in Silicon Valley [email protected]

Korea Economic Daily