Nvidia’s board of directors has hired an executive search firm to find a possible replacement for the chipmaker’s founder and CEO, Jensen Huang, Bloomberg reported, citing a source. According to The Wall Street Journal, the board is preparing to remove Huang following reports of two extramarital affairs, including one with an alleged Chinese spy. One candidate for the position is Apple hardware chief Johny Srouji, who was considered for the role of Intel CEO in 2019, a Semafor source says.
While the search for a permanent leader continues, the board is discussing appointing an interim head of the company, the Bloomberg source added. Some board members would like Nvidia CFO Colette Kress to take the role if Huang steps down, Semafor reports, citing sources. But the board as a whole has not yet made a decision: its meeting was scheduled for the evening of November 11, U.S. time, the outlet notes.
Company boards can spend hours discussing the fate of a chief executive, and a lack of news does not necessarily mean a decision has yet to be made, Bloomberg journalists note. Even after a decision is made, its announcement may be delayed significantly because of negotiations over departure terms and preparations for the announcement, they add.
Removing a company’s chief executive is no easy task for a board, Bloomberg writes. Huang is Nvidia’s founder and the only leader in the company’s history, and its shares have risen more than 700,000% under his leadership. But if he stays on, Nvidia is likely to face a barrage of questions from lawmakers, investors, customers and employees.
Washington is in the loop
Nvidia’s board informed the White House about its planned meeting, Semafor reported, citing a senior administration official. On November 11, Democratic senators Elizabeth Warren and Chris Coons asked the commerce secretary, secretary of state and White House chief of staff to ensure that records are preserved concerning shipments of Nvidia chips to China or to companies that could divert them there. The request also covers materials related to Huang and the alleged spy, as well as his correspondence with Trump.
The alleged spy, Alice Huang, was a senior executive at Singapore’s Megaspeed International, one of Nvidia’s largest customers in Southeast Asia. U.S. authorities have been investigating the company for several months over possible chip smuggling, Bloomberg notes. According to media reports cited by the senators, officials at the White House, State Department and Commerce Department “knew of concerns” about Nvidia, its ties to Megaspeed and an alleged Chinese intelligence operation, but “did not block” further shipments of advanced AI chips. Megaspeed and Nvidia deny any wrongdoing, while Beijing denies the accusations of spying on Jensen Huang.
Investors bet on competitors
Nvidia shares fell 8.6% in Nasdaq after-hours trading on November 11 from their closing price in the regular session, to $158.8, dropping below their low for the previous 52 weeks. On the U.S. over-the-counter Blue Ocean venue, the decline had narrowed to 7.3% ($161.1) by 09:24 on November 12, Astana time.
Shares of competitors rose in after-hours trading: AMD gained 4.3%, chipmaker Broadcom rose 2.4%, and Google parent Alphabet gained 0.3%. Investors are betting that these companies will be able to win some of Nvidia’s business, Bloomberg writes.
AMD, Nvidia’s closest rival, is seeking to gain ground in the fast-growing AI chip market. Samsung Electronics, the world’s largest memory chipmaker, could also benefit from Nvidia’s troubles. The company expanded its partnership with AMD in artificial intelligence in March, Bloomberg says.ㅤ