Nvidia’s Jensen Huang resigns after scandal; reports of third affair emerge
Nvidia chief executive Jensen Huang has resigned, capping a spectacular downfall for a poster boy of the artificial intelligence boom, and his exit, following reports of extramarital affairs, now thrusts the chipmaker into an uncertain future.
After a dizzying series of headlines about Huang’s infidelity and ties to an alleged Chinese spy, his departure sets off a scramble to find a permanent replacement to lead the multitrillion-dollar colossus that grew from obscurity to a perch between Apple and Microsoft at the top of the S&P index. Nvidia chief financial officer Colette Kress has been named as the interim chief executive.
As Huang’s departure weighed on the share price of the world’s most valuable chipmaker, AMP chief economist Shane Oliver said companies such as Nvidia are so big that it is impossible for Australia’s superannuation funds to not be exposed to them.
“The risk is managed by diversification,” he said, noting most super funds hold a combination of assets including Australian and global shares, real estate assets, fixed interest and cash.
Oliver says roughly 25 to 30 per cent of a typical Australian super fund is invested in global shares, of which 70 per cent is in US shares. Since Nvidia accounts for about 6 to 7 per cent of the US S&P 500 index, about 1 per cent of Australia’s $4.5 superannuation assets may be invested into the tech giant, although exposure can be lower for self-managed super funds which tend to hold a smaller proportion of international shares.
While that exposure may seem substantial to a single stock, Oliver says there are also risks to reducing exposure.
“You expose yourself to underperformance if you underexpose yourself to growth stocks such as Nvidia because it’s a key part of the global economy,” he said. “Super in Australia is designed in a way that is pretty well diversified with protection on the downside, as well as exposure to some upside.”
The resignation sent US-listed Nvidia shares plummeting 14 per cent at the opening bell, before it closed more than 4 per cent lower.
Huang faced growing calls to resign after his affair with a Chinese businesswoman who reportedly was also acting as a spy for Beijing. His troubles compounded late on Wednesday (US time) after media reports said Huang had another extramarital affair with an Nvidia employee who reported to him. Reuters reported on Friday that Huang had a third affair, with another Nvidia employee.
Nvidia said Huang’s resignation as president, chief executive and board member was “effective immediately”.
The move has sparked a scramble to find a permanent replacement to lead Nvidia, which had no succession plan. The company said in a statement that the board would consider candidates from both inside and outside, while US President Donald Trump weighed in, saying former Apple chief executive Tim Cook should take the role.
“NOW THAT Nvidia CEO JENSEN HUANG, who has done a fantastic job, has resigned, there is only one man to take his place – TIM COOK of Apple,” Trump said on social media. “A Legend replaces a Legend!” he added.
Cook stepped down after a 15-year stint as Apple’s chief executive in September and is now executive chairman at the iPhone maker.
Nvidia named Kress, the executive vice president and chief financial officer, as interim chief executive. She became CFO in 2013, overseeing the company’s global finance operations. Before that, she worked for three years at Cisco and spent 13 years at Microsoft.
In a statement, Kress said that Nvidia’s “strength has always come from its people” and that she was “committed to building on the extraordinary foundation Jensen created over the last 33 years”.
The board of directors also named its first-ever chairman, Harvey Jones, an entrepreneur and venture investor.
Nvidia’s board had gathered to discuss Huang’s future after revelations about his affair with Alice Huang, a former executive at Singapore-based Megaspeed International suspected of being a Chinese government agent. The two are not related.
In its first statement since the scandal broke, Megaspeed said that it takes its obligation to comply with US export control laws “extremely seriously”. The company prominently touts a partnership with Nvidia on its website.
“Megaspeed is committed to working constructively and transparently with the US government,” said the statement signed by its chairman and chief executive, Tan Yong Pong, who also goes by James Tan.
Nvidia said it had “no reason to believe” that either national security or company secrets were compromised, but that its inquiry would examine all available information.
Last month, The New York Times reported that US intelligence agencies discovered Jensen Huang had developed a close relationship with Alice Huang – and determined she was feeding information directly to Beijing. On Sunday, Trump announced that the FBI was investigating.
Megaspeed faced claims last year that it was illicitly shipping advanced Nvidia computer chips into China, but in December said there was “no evidence” of such exports.
Singaporean authorities on Thursday said they had questioned Alice Huang and confiscated her passport last year as part of an investigation into Megaspeed. They concluded at the time that there wasn’t enough evidence she had committed a crime, but barred her from returning to the country.
China has denied engaging in an attempt to ensnare Huang, who headed one of the world’s most valuable companies. Nvidia has become a leader in making chips that power AI, and Huang has lobbied Washington to loosen limits on sales of Nvidia chips to China. In January, he won Trump’s approval for its H200 chips to China.
Megaspeed said on Thursday that it has co-operated with the US Department of Commerce’s Bureau of Industry and Security (BIS), which enforces national security restrictions on technology exports, and was ready to “co-operate fully with any other relevant US government authority”.
It said it had hired a US law firm to conduct a “comprehensive census” of its computer chips and to verify its export controls.
“Megaspeed welcomes appropriate government scrutiny and is committed to demonstrating through concrete actions that it operates responsibly, transparently, and in accordance with applicable US laws,” it said.
Apart from questions over national security, Megaspeed’s finances also have drawn attention. Its total assets soared roughly 90-fold from late 2023 to 2024, to almost $US3 billion ($4.4 billion) according to Singapore corporate records.
Revenue surged to more than $US294 million in 2024 from none in 2023.
AP, Reuters
With Millie Muroi
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