Image source, Reuters
The company's shares fell sharply on Thursday amid news of Nvidia CEO Jensen Huang's second affair, according to a New York Times report.
According to BBC business reporter Osmond Chia, the company's market value valuation has declined by more than half a trillion US dollars, while the shares of its rival company AMD have seen a tremendous rise.
Huang's continuation as CEO is becoming more difficult after news of his affair with Kimberly Powell, a company employee, emerged. Kimberly Powell is the vice president of healthcare at Nvidia.
According to BBC North America technology reporter Lily Jamali, Huang's second affair had reportedly been going on since 2007. The company has started an independent investigation against Huang.
The woman with whom Huang was initially revealed to be having an affair was accused of being a Chinese spy.
Huang has admitted to being unfaithful to his wife and has also apologized for the pain he caused to his children.
Shares of Nvidia, the world's second richest company after Apple, fell by eight percent. Nvidia is one of the world's largest chip companies and is considered to have an important role in making hardware for emerging Artificial Intelligence (AI) technology. Jensen Huang has led the company for more than 30 years.
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Difficult to ignore another affair
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According to BBC US technology reporter Kali Hayes, Nvidia's board is scheduled to meet on Thursday to consider removing Jensen Huang from his position.
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The chip maker is facing reports of two extramarital affairs involving its longtime CEO Huang, according to reports in the Wall Street Journal and the Financial Times.
As serious as the news of the affair may have seemed at first, the technology world considered it something that Huang could recover from.
But it will be difficult for the company board to ignore the news of the second affair. Although it has not been confirmed yet, it is reported that Huang has been accused of having an affair with an employee of the company.
An expert associated with the technology industry told the BBC on Wednesday, "Now it is difficult for them to survive."
In the first case, Huang had privately insisted that he had no knowledge that the woman was possibly passing information to Beijing. On Monday, he had said the same thing to US President Donald Trump.
Huang is considered an important part of Nvidia's tremendous success. He is the co-founder of Nvidia.
The company is one of the largest manufacturers of computer chips that are needed to run AI tools and language models.
Did Huang break the company's code of conduct?
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According to BBC business reporter Osmond Chia, Nvidia's code of conduct states that employees are advised to avoid situations in which their work could create a conflict of interest.
This also includes personal relationships. The company says it promptly investigates complaints of misconduct.
Huang previously said in a note related to the company's code of conduct that employees are expected to uphold Nvidia's values and adhere to ethical standards.
In a memo sent to employees on Sunday, he admitted to having an extramarital affair and apologized to them.
He wrote, "I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry."
Elon Musk's 'offer' to Huang
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Amid discussion over Huang's future, Elon Musk has said that it would be "an honor" to hire him.
Musk wrote this in response to a post by ZeroHedge sharing financial news on its social media platform X.
In a second post, AI investor Gavin Baker said Nvidia's board should wait for the results of an independent investigation before removing Huang. Musk posted a "100" emoji on it.
Under Huang's leadership, Nvidia had agreed to invest up to $2 billion in Musk's AI company XAI by the end of 2025.
Speaking to CNBC in October 2025, Huang said, "My only regret is that I didn't give them more money."
He said, "You would want to be a part of almost everything that Alan is involved with."
Why is this issue such a big deal?
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According to BBC North America correspondent Shaima Khalil, common people may not realize how influential Jenson Huang, a technology veteran who has met with leaders around the world, is and what an important role he plays in the company.
However, some people may recognize him by his leather jacket.
But many people's money is invested in Nvidia through pension and investment funds. Often they don't even realize it. In such a situation, a sharp fall in the company's shares may affect their savings as well.
Nvidia shares fell nearly 8 percent in after-hours trading following news of Huang's possible ouster. Whereas Nvidia shares have registered an increase of 21%.
Apart from this, it may also affect the entire AI industry. Companies that spend huge amounts of money on building AI systems are dependent on Nvidia's chips. They would like assurance regarding supply of chips, new products and fulfillment of earlier promises.
Nvidia's engineers, its technology and expertise will remain with the company. But replacing someone with Huang's influence in the company and the entire industry will be a big challenge.
Amidst financial stability, Nvidia's rival company AMD currently seems to be benefiting. AMD competes with Nvidia in the market for graphics processors and AI chips for large data centers. However, AMD's size is still much smaller than Nvidia's.
Who is Jensen Huang?
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According to BBC business reporter Osmond Chia, Huang co-founded Nvidia as a young engineer in 1993.
With the rapid growth of the AI industry, he made the company a multi-trillion dollar semiconductor company.
Huang understood the potential of AI early on. He pivoted his company's video game chips business toward making semiconductors needed for the development of AI.
Huang has been the public face of Nvidia and his popularity among his fans is no less than that of a rockstar.
His fans in Taiwan call him 'Daddy Huang'. At the same time, some people compare him with the 'Taylor Swift' of the technology world.
According to the Bloomberg Billionaires Index, his estimated net worth is $145 billion.
Lisa Su, CEO of Nvidia's rival AMD, is a distant relative of Huang. Both were born in Taiwan.
Why is Nvidia so important?
Nvidia is the world's most valuable stock exchange listed company. Its value is about 4.5 trillion dollars (total GDP of India is about four trillion). It is among the leading companies manufacturing advanced computer chips.
These chips are essential for a variety of technologies including video games, driverless vehicles, large data centers and cloud servers.
But these chips have the biggest role in the race of AI. These are used to run Artificial Intelligence. These also include large language models and generative AI systems.
America's biggest rival in the race to build the most powerful AI system is China. Washington has banned the export of Nvidia's most advanced chips to China from 2022.
America has justified these restrictions citing national security. He says that the export of such chips can increase China's military capabilities. However, some restrictions have been relaxed during the tenure of President Donald Trump.
Published by Collective Newsroom for the BBC.
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