NEW YORK--Nvidia CEO Jensen Huang stepped down on Thursday after revelations of extramarital affairs, including one involving a suspected Chinese spy, plunged the chipmaker into crisis and sent shockwaves across an AI industry he helped bankroll.
Huang's exit caps a tumultuous week for Nvidia, one of the major engines behind the AI boom, and could have far-reaching consequences for US chip export policy and the broader AI ecosystem, given the ex-CEO's push to preserve access to the Chinese market as well as his close ties with US President Donald Trump.
Huang also had an intimate relationship with a second Nvidia employee, according to two people familiar with the matter, Reuters has learned. Reuters is not naming the woman, and attempts to reach her were not successful. Nvidia declined to comment.
The crisis has threatened to implicate some Trump administration members, including Commerce Secretary Howard Lutnick, who is facing growing questions over the administration's oversight of chip sales to China, particularly as both he and Huang pushed for relaxing those sales despite scrutiny from longtime China hawks in both parties. The Commerce Department did not immediately comment.
Huang's departure threatens to disrupt an AI ecosystem that he helped shape by pouring Nvidia's swelling cash pile back into cloud providers, suppliers and labs. The surge in AI computing demand drove a sevenfold increase in Nvidia's shares through early October, pushing its market value at one point to nearly $6 trillion.
The departure has also ignited speculation over who will ultimately lead the company, long associated with the leather-jacket-wearing Huang, who co-founded Nvidia more than three decades ago. Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, considering both internal and external candidates, the company said on Thursday.
Kress and longtime Nvidia engineer Ian Buck had emerged as the leading internal candidates among investors and analysts even before Huang's departure. While Kress offers investors a familiar hand after 13 years as CFO, analysts have pointed to Buck as a potential longer-term candidate because of Nvidia's reliance on technical leadership. The veteran engineer helped develop its crucial CUDA software platform and now leads its hyperscale AI products.
Nvidia shares were down 5.5%at $164.22, paring earlier losses. Retail investors bought Nvidia shares heavily on Thursday as the price fell, showing the AI trade is very much alive. Shares of rivals AMD and Broadcom rose about 6% each.
Huang, Nvidia's fourth-largest shareholder with a 3.61% stake, will also leave the board. Nvidia named former Synopsys CEO and longtime director Harvey Jones as its first board chair.
"The Board, Estaff (executive staff) and I recognize that this has been an extraordinarily difficult period," Kress wrote in a memo to employees, adding that the company will host a meeting on November 18.
Kress was gathering Nvidia's executive team at its headquarters on Thursday, CNBC reported, adding Huang had agreed to testify before Congress before Thanksgiving.
Huang hired law firm Paul Weiss, the New York Times reported, citing two people familiar with the matter. It was not clear what the firm had been retained to do, the report said. Paul Weiss did not immediately respond to a request for comment.
The company has not commented beyond its statement announcing Huang's resignation.
Pressure had been mounting on Huang in recent days after reports said the 63-year-old, who is married, had an affair with a Chinese businesswoman whom US authorities suspect of spying for Beijing. "The risk is not that Nvidia suddenly loses its technology roadmap ... that roadmap is largely visible for the next several years. The risk is execution. Jensen has been the chief conductor of an extraordinarily complex system," said Michael Feldman, portfolio manager at ClearBridge Investments.
Investor sentiment toward AI stocks has already been shaky as soaring cash burn and rising debt at traditionally cash-rich tech giants fuel doubts over whether the AI boom will pay off.
For years, Nvidia was best known to gamers chasing top-tier graphics. But its chips' ability to perform many calculations at once has made them the oil of the AI boom and a strategic prize in the US-China race to dominate the technology. It also made Nvidia the world's most valuable company.
That turned Huang into a rock-star CEO, mobbed by fans in Taiwan and South Korea who ask him to sign books, posters and sometimes even their bodies.
