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Kari Hayes Technology Reporter, Lily Jamali North America Technology Editor
Jensen Huang, CEO of US semiconductor giant Nvidia, announced his resignation on the 12th. It was first discovered that Huang had an affair with a person suspected of being a Chinese spy. It's causing huge repercussions from Silicon Valley to the U.S. Congress.
Nvidia is currently under intense scrutiny from members of Congress in Washington, D.C. Huang is also being asked by lawmakers to explain whether one of the people he allegedly had an affair with was a Chinese spy.
Nvidia, which has become one of the most valuable companies in the world due to the AI boom, has seen its market capitalization drop by $550 billion (approximately 88 trillion yen) in just five days as the scandal continues to make headlines.
On this day, the company appointed Chief Financial Officer (CFO) Colette Kress as interim CEO. Mr. Kress called an emergency meeting of management to discuss the company's future.
Huang's actions not only potentially crossed a professional line, but also exposed Nvidia to a barrage of questions from American politicians concerned about national security risks.
Huang, who has been the face of Nvidia since 1993, admitted on the 8th that he had been "unfaithful" to his wife, following reports of an affair with suspected Chinese spy Alice Huang (who has the same last name but is not related).
Furthermore, on the 11th, it was reported that she had an affair with an Nvidia executive.
Alice Huang (also known as Huang Le) worked as an executive at Singaporean company Megaspeed. According to the New York Times, he is suspected of being an agent of Chinese intelligence.
China denies the allegations, calling them defamatory.
U.S. Attorney General Todd Blanche said on Wednesday that the Justice Department has not yet determined whether Alice Huang was spying for the Chinese government.
Democratic Sens. Elizabeth Warren and Chris Coons, as well as Democrats on the House Foreign Affairs Committee, publicly called on Nvidia CEO Huang to explain the matter to Congress.
A Senate staffer told the BBC that Huang could be served with a subpoena if he refuses to voluntarily appear before the committee.
Nvidia executives have repeatedly declined to comment since the 11th. A representative for CEO Huang also declined to comment on the 12th.
second adulterer
According to US media, Huang's second alleged affair partner is Kimberly Powell, a longtime Nvidia executive who was a direct report to Huang.
Sources told the BBC that Nvidia employees were aware that the pair seemed unusually close.
Huang was widely expected to weather the storm after his affair with Alice Huang became public and Nvidia announced it would investigate whether its CEO had been "targeted by foreign intelligence services."
One current Nvidia employee told the BBC that the initial reports of an affair were largely ignored by employees.
According to this person, it wasn't until the allegations of an affair between CEO Huang and company executives became public that employees began to feel that something was wrong.
Another employee said he was instructed not to speak to the press or comment publicly on the situation.
As stock prices have soared, many Nvidia employees have made millions of dollars in profits from their stock holdings.
Nvidia said there is "no reason to believe that national security or sensitive Nvidia information has been compromised." But it also said it would consider all available information in an independent investigation.
Huang is not the first tech mogul to be embroiled in an extramarital affair scandal.
Bill Gates, the founder of Microsoft (MS), and Jeff Bezos, the founder of Amazon, were both revealed to have had extramarital affairs in the past 10 years. Both men are currently divorced from their then-wives.
CEO Huang and his wife, Lori Huang, have been married for more than 40 years. The couple's two children also serve as executives at Nvidia.
Impact of stock price decline
Nvidia has experienced rapid growth under CEO Huang. Semiconductor chips originally intended for computer games have been switched to AI. The entire industry now relies on the company's powerful chips.
Additionally, over the past four years, as AI technology has evolved into chatbots and large-scale language models (LLMs), companies developing AI tools have needed large numbers of NVIDIA chips that can process large amounts of data.
NVIDIA is currently searching for a permanent CEO to replace him.
Huang's ouster has been a hot topic in the San Francisco Bay Area, which is home to tech industry staff, executives and billionaires, according to multiple technology industry insiders interviewed by the BBC this week.
Nvidia's stock price this week marked its biggest five-day decline since the company went public 27 years ago.
The company's market capitalization has risen more than 470% over the past five years, peaking just a few weeks ago. However, it is currently down 31% due to uncertainty across the tech industry.
Given Nvidia's size and recent success, such a stock decline could have a direct impact on the wealth of ordinary Americans.
Nvidia's market capitalization accounts for approximately 7% of the S&P 500, an index of 500 major US companies. The S&P 500 is offered as an index fund in American retirement savings accounts and is very popular.
These account balances increase and decrease depending on stock market fluctuations.
(English article: Scandal-hit Nvidia CEO Jensen Huang quits, plunging AI chipmaking giant into turmoil)
