Nvidia's board moves to oust Jensen Huang; NVDA falls 9%
Two reports landed minutes apart on Wednesday evening. Together they put the chief executive of the world's most valuable chip company on the clock.
Nvidia's board is preparing to remove Jensen Huang and was set to meet as soon as Wednesday to decide his future, the Wall Street Journal reported, citing people familiar with the matter. The story broke minutes after the New York Times reported that Huang had a relationship with Kimberly Powell, Nvidia's vice president of healthcare — an executive who reports to him. Nvidia and Powell did not respond to requests for comment from CNBC, which put the first number on the damage: the stock fell more than 9% in after-hours trading, on top of a 7% decline earlier in the week that had already put the shares on pace for a sixth straight weekly loss.
This is the story of the AI boom's most important supplier, told through its governance. For 33 years Huang has been Nvidia's only chief executive, and for most of that time the company's stock price was the argument for leaving him alone. That argument no longer holds.
The sequence matters, because the board has already staked out a position twice. Huang wrote to staff on Sunday admitting he had been unfaithful to his wife — "My actions hurt her and our children. There is no excuse for what I did," he wrote — and the board publicly backed him to stay as chief executive the same day. By Tuesday it had hired the law firm Wachtell, Lipton, Rosen & Katz and a former federal prosecutor to run an independent investigation into his conduct and the espionage allegations around Alice Huang, an Nvidia customer executive whom US intelligence believes was recruited by China's Ministry of State Security. On Monday, President Trump said the FBI was looking into the matter, and senior lawmakers in both parties called for congressional investigations; the House China committee has demanded answers and a subpoena deadline landed the same week.
The Powell disclosure changes the kind of question the board is answering. Alice Huang sits outside the company, and the allegations against her turn on intelligence assessments the board cannot verify itself. Powell is inside the building: an 18-year Nvidia veteran who has run the healthcare business since 2017 and is one of the company's more prominent public faces, according to the Financial Times. The Times reports the two were seen being affectionate at a hotel in San Jose in March, and CNBC quotes a former employee saying rumors about the relationship had circulated for years. A relationship with a direct report is a documented policy matter with paper behind it — which is likely why an ouster report followed within minutes rather than weeks.
The governance math makes the board the only player that can end this. Most of Huang's Nvidia shares are co-owned with his wife, Lori Huang, and held in trusts — about 800 million shares sit in those trusts — while he holds roughly 70 million personally and has limited economic control over the company, CNBC reports. He cannot out-vote his own board, and he does not control the succession machinery. Whatever happens next is a directors' decision, not a founder's.
What an exit would mean for the AI buildout is the part markets have not priced. Nvidia's customers plan capex years out around its allocation calendar, and the company has spent two years converting that scheduling power into a position at the center of every frontier lab's training run. The moat is the software stack, the systems business and the supply relationships — none of which is a person. But the person has been the coordinating mechanism inside all three, and there is no public succession plan to point to. Nvidia is worth $4.2 trillion, per the Financial Times, in a market that sold off AI infrastructure names after the midterms and is already asking whether the financing web around the company is too big to fail.
The counter-argument deserves real weight. A board that is "preparing" to act has not acted, and boards have reversed course on far less. Nvidia declined to comment, the Wachtell investigation is not finished, and the directors publicly backed Huang four days ago. Removing a founder-CEO mid-cycle is the most expensive thing a board can do, and the alternatives — executive chairman, a leave of absence, a confidence statement after the meeting — are all cheaper. It is entirely possible Wednesday's meeting ends with Huang still in the job and a promise of findings later. What makes that harder this time is that the second disclosure is the kind a board's own policies, not a foreign intelligence service, are built to adjudicate.
There is also a market question that outlives the personnel question. Nvidia's shares are heading for a sixth consecutive weekly decline, and the AI trade has been repricing on power costs, data-center moratoriums and the durability of demand regardless of who runs the company. If the stock reaction to a leadership crisis is bigger than the reaction to any of those fundamentals, that tells you how much of this trade was a bet on one man. We covered the earlier phase of this story when the spy allegations first surfaced — Nvidia's Jensen Huang was close to an alleged Chinese spy — and argued last week that the comms strategy had run ahead of the legal one in The Take — Nvidia hired a scandal fixer before its lawyers. Both threads now converge on a single board vote.
What to watch: whether Wednesday's meeting produces a statement of confidence, a transition plan, or silence; whether Huang keeps the chair if he loses the CEO title; what Wachtell's findings say about the Powell relationship specifically; and whether the FBI inquiry widens from a personal-conduct matter into Nvidia's China sales channel. The last one is the one that would outlast the scandal.
Should a board be able to remove the most powerful CEO in AI over an internal policy violation — and if it does, what does that say about how the rest of the industry handles its own? Write to us via our contact page.
