Nvidia loses 600 billion dollars in market value this week
Board meets on Jensen Huang's future after Wall Street Journal reports preparations to oust the founder, chief executive owns 3.6 percent and has no obvious successor
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Nvidia board reportedly meeting to decide CEO Jensen Huang’s future as chip giant’s share price plunges – follow live
theguardian.com
Nvidia's board is meeting to decide whether to remove Jensen Huang as chief executive, Reuters reported, citing a person familiar with the matter, after the Wall Street Journal wrote that the company is preparing to oust its founder. Shares slid about 8 percent in after-hours trading on the report. Including that selloff, Nvidia has lost roughly 600 billion dollars of stock market value this week.
The controversy began with revelations about Huang's relationship with Alice Huang, a businesswoman whom US intelligence has said was involved in facilitating shipments of Nvidia chips to Chinese firms. The board announced an investigation into that relationship, and the New York Times has since reported a second affair, with a company executive who reported to Huang. In a memo to employees on Sunday, Huang acknowledged that he had been unfaithful to his wife and said he took "full responsibility". The memo gave no details about the relationship.
Huang, who is 63, has no obvious successor, and dozens of direct reports answer to him alone — a concentration of control the company has never had to plan around. Removing a founder is a vote; replacing the decisions that run through his office is a longer project. The after-hours selloff is a first measure of what investors think Nvidia is worth without the man who runs it.
The distinction between the two affairs matters. An affair with a subordinate is an internal conduct matter. The relationship under board investigation involves a woman whom American intelligence has linked to the flow of Nvidia chips into Chinese firms, which is why the board is treating this as something other than a private lapse. Nvidia is the world's dominant supplier of AI processors, and the valuations stacked on its chips are priced on the assumption that supply keeps flowing; an 8 percent lurch in a single after-hours session reprices all of them at once.
Huang owns about 3.6 percent of the company he founded. This week, that stake lost more than 20 billion dollars of its value.