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(Sharecast News) - Shares in Nvidia came under renewed pressure on Thursday, on reports the artificial intelligence giant could be gearing up to oust its influential chief executive and founder.
Jensen Huang, who has led the $4.2trn semiconductor manufacturer for more than three decades, admitted over the weekend to having an affair. Although neither he nor Nvidia have named the woman, she was widely reported to be Alice Huang, an executive at Singapore-based Megaspeed who the US authorities believe is a Chinese spy.
Huang has apologised to employees for the affair. Nvidia launched an investigation, but has otherwise stood by him.
However, it was reported overnight that Huang had also had an affair with a woman who works at Nvidia, according to the New York Times. That in turn has caused the board to hold urgent talks about his future, it was reported by the Financial Times and Wall Street Journal.
By 1100 GMT the stock had tumbled 12% in pre-market trading on Wall Street.
The board, which has no chair, could opt for Huang to step back from his chief executive role while the investigation is carried out, or push for his immediate departure, the FT noted.
His departure, however, would likely have far-reaching consequences for both Nvidia and the wider AI sector. The company is leading the AI boom, with its chips integral to the work of companies such as OpenAI and Anthropic, and much of its success has widely been attributed to Huang. He is also extremely influential, with the ear of both Washington and Beijing, and has a close relationship with Donald Trump, who earlier this week called him a "high-quality person".
However, both the Democrats and Republicans are calling for an investigation into Huang in light of the revelation.
Russ Mould, investment director at AJ Bell, said the emergence of a possible second affair put his position as chief executive "in real peril".
He continued: "$671.4bn has been wiped off the company's market value since the initial revelations emerged on Sunday. This kind of situation would be damaging at any company, but is exacerbated by just how strong the key person risk is perceived to be at Nvidia. Huang is the man who led the business to become the poster child of the AI story and for a time the largest company on earth. No real succession plan has been made public, so inevitably investors will ask questions about whether Nvidia can be as successful if Huang departs.
"Even if Huang stays, this whole situation will be a cloud hanging over Nvidia for some time to come."