Nvidia's board is preparing to remove co-founder and chief executive Jensen Huang, The Wall Street Journal reported Wednesday, hours after The New York Times reported that Huang had a second extramarital relationship, this time with a senior executive who reports to him.
The Times, citing five people who worked at Nvidia, reported that Huang had a relationship with Kimberly Powell, the company's vice president of health care. Two of the people told the newspaper that Huang and Powell were seen being affectionate at a hotel in San Jose, California, during Nvidia's GTC conference in March. Powell joined Nvidia in 2008 and leads its worldwide health care business.
Nvidia declined to provide a statement to the Times, and Powell did not immediately respond to a request for comment. When contacted about Powell, Huang declined to discuss the relationship and ended the call, according to the report. Both Huang, 63, and Powell, 48, are married to other people, the newspaper said.
The report landed days after Huang acknowledged infidelity to employees in a November 8 letter, following reports that he had an affair with Alice Huang, a Chinese executive whom U.S. intelligence officials believe is a suspected Chinese intelligence asset. Nvidia's board launched an independent investigation the same day and has retained former acting U.S. Attorney Joon H. Kim and the law firm Wachtell, Lipton, Rosen & Katz to lead it.
The second reported relationship changes the nature of the crisis for the board, because it involves a direct report rather than an outside executive. The Journal reported that the board was preparing to meet as soon as Wednesday to determine Huang's future, and that it could act before the independent investigation concludes. Nvidia has no publicly named successor.
Shares of Nvidia fell more than 8% in Wednesday's extended trading session following the reports, according to CNBC and MarketWatch, erasing a relief rally earlier in the day. The stock had already fallen 4.27% on Monday after the board probe was announced. Shares of rivals Advanced Micro Devices and Broadcom rose in after-hours trading.
Analysts warned the stakes of a leadership change are enormous. Wedbush analyst Dan Ives estimated Nvidia's valuation could fall 25% to 30% if Huang left, according to Yahoo Finance's live coverage. Nvidia is scheduled to report fiscal third-quarter results on November 17, and Huang faces a private congressional briefing on November 18 about his interactions with Alice Huang.
