Jensen Huang Steps Down as NVIDIA CEO: Chinese Spy Scandal Throws a Wrench in the Works

Jensen Huang is stepping down as Nvidia CEO effective immediately, four days after admitting he had been unfaithful to his wife. Chief Financial Officer Colette Kress will take over on an interim basis. An independent investigation into possible foreign espionage involving Huang is ongoing.

Huang is also leaving his role as Nvidia president and stepping down from the board, according to the official announcement on November 12. He led the chip designer for 33 years after co-founding it in 1993. Nvidia is searching inside and outside the company for a permanent successor.

In a letter to employees on November 8, Huang apologized and pledged to cooperate with the investigation. The Associated Press has linked the affair to Alice Huang, a former executive at Singaporean data center company Megaspeed. The news agency reports that US authorities suspect she worked for the Chinese government. China’s Foreign Ministry has rejected the espionage allegation.

The board is investigating whether a foreign intelligence service targeted Huang. When the probe was first announced, the board said it still had confidence in Huang and saw no reason to believe US security interests or trade secrets had been compromised. On November 10, independent directors brought in Joon H. Kim and his law firm. Kim previously served as acting US attorney for the Southern District of New York.

On Wednesday, November 11, The New York Times reported according to Reuters that Huang had also allegedly had an affair with an executive who reported directly to him. That evening, the board met to discuss his position, the news agency reported. The official announcement does not explain what directly prompted his resignation.

Megaspeed buys Nvidia chips and rents out computing power. US authorities are investigating whether the company helped divert advanced AI chips to China, Reuters reports. For certain chips, including Nvidia’s H200, the US export regulator reviews license applications case by case and imposes security conditions.

Megaspeed says it has cooperated with US inspections. On Thursday, the company said it had hired an outside law firm to inventory its graphics processors and assess its compliance with export rules.

The US Congress is also demanding answers. The chairs of three House committees have asked Huang to give a closed-door briefing on November 18 about his contacts with Alice Huang and Nvidia’s handling of sensitive information.

Kress will hold the interim role alongside her job as chief financial officer. She has led Nvidia’s finances since 2013 and previously worked at companies including Microsoft and Cisco. Nvidia has also appointed Harvey C. Jones, a former executive at chip software company Synopsys, as the board’s first chair. Jones expects Nvidia to meet its customer commitments and deliver on its product roadmap.

Nvidia shares fell about 14 percent at the opening of trading on Wall Street, the Associated Press reported. As AI Wereld explained earlier in its analysis of Nvidia’s reliance on Huang, the company had already warned in its annual report that inadequate succession planning could undermine its strategy.

In the most recently reported quarter, Nvidia’s data center division generated $89 billion in revenue, more than 92 percent of the company’s total. Nvidia will report its latest quarterly results on Tuesday, November 17. In August, the company forecast revenue of $108 billion for the quarter, plus or minus 2 percent.