Ousted Nvidia CEO Huang Had a Relationship With a Second Employee, Sources Say

The report widens a scandal that has already cost the world's most valuable chip company its co-founder and left it without a permanent leader five days before quarterly results. Huang's departure followed reports of two other extramarital relationships: one with Alice Huang, a former executive of Nvidia customer Megaspeed whom US intelligence suspects of being a Chinese spy, and one with Kimberly Powell, Nvidia's vice president of health care, which The New York Times reported and which involved a direct report.

Nvidia declined to comment on the latest report. Powell, Huang and a representative of the board did not respond to requests for comment, and Alice Huang could not be reached, according to Reuters. In a statement on November 8, Huang admitted to an affair and apologised for being "unfaithful to my wife", without naming the woman involved.

The Investigation Continues

Huang's exit will not end the company's inquiry. Nvidia plans to continue investigating whether he "has been the target of a foreign intelligence effort" connected to his relationship with Alice Huang, The Information reported, citing a person familiar with the situation. The board's independent directors hired the law firm Wachtell Lipton earlier this month to run that review, and at the time expressed confidence in Huang.

Huang has separately hired the law firm Paul Weiss, according to CNBC and The New York Times; the purpose of that engagement has not been disclosed.

The board has named finance chief Colette Kress as interim chief executive. She will keep her role as CFO while directors look at internal and external candidates for the permanent job. Harvey C. Jones, a director since 1993, has become the board's first-ever chair. Kress was gathering Nvidia's executive team at the company's headquarters on Thursday, according to CNBC, and the company has said it will still report fiscal third-quarter results on November 17.

Pressure From Washington and Wall Street

Nvidia shares fell more than 13% at Thursday's open, taking the company's market value below $4 trillion, CNBC reported, and were down 5.5% later in the session according to Reuters. The stock had closed at $173.73 on Wednesday, against a high of $239.24 on October 6.

Analysts moved quickly. Stifel cut its price target to $205 from $315 while keeping a Buy rating. Baird downgraded the stock to Neutral and lowered its target to $200 from $500. Cantor Fitzgerald's CJ Muse reduced his target to $250 from $350 and kept an Overweight rating. Rosen Law Firm has filed a proposed class action on behalf of investors.

Retail buyers moved the other way, putting a net $111 million into the stock in the first 30 minutes of trading, according to Vanda Research. Shares of companies tied to Nvidia's financing and compute deals fell harder, with CoreWeave down about 12% and Nebius about 17%, while AMD rose about 3%.

In Washington, House Foreign Affairs Committee chair Brian Mast said Huang had agreed to testify before Congress ahead of Thanksgiving, with the date still under negotiation, and that he would issue a subpoena if needed. Democratic lawmakers Ron Wyden and Richard Neal have opened a separate inquiry into export approvals for Nvidia's H200 chips to companies linked to the Chinese government.

The next fixed point is November 17, when Kress is due to present Nvidia's results and face analysts' questions on leadership, the investigation and China for the first time as interim chief.