Nvidia stock falls after report board may oust CEO Jensen Huang

Nvidia shares fell more than 7% in after-hours trading on Wednesday after The Wall Street Journal reported that the company's board is preparing to oust CEO Jensen Huang. The report came minutes after The New York Times reported that Huang had an extramarital relationship with Kimberly Powell, vice president of health care at Nvidia. Nvidia did not immediately respond to CNBC's request for comment.

Reports on Huang's conduct

According to The New York Times, Huang and Powell were reportedly captured on camera being affectionate with one another at a hotel in San Jose, California, in March. Rumors of an affair between Huang and Powell have circulated for years, according to a former employee who asked not to be named because of the sensitivity of the matter. The report comes days after Huang admitted to an affair with Alice Huang, according to The Financial Times, who U.S. intelligence officials believe is a spy for China's Ministry of State Security, The New York Times reported.

"I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did," Huang wrote in a message to Nvidia staff on Sunday. "I am deeply sorry." Nvidia's board of directors has opened an independent investigation and hired the law firm Wachtell, Lipton, Rosen & Katz to look into the spying allegations. Heller, the crisis PR firm Huang reportedly hired as early as last year, did not immediately respond to CNBC's request for comment.

Stock and business context

Nvidia's stock is down 7% this week and is on pace for its sixth straight weekly slide. The AI infrastructure trade was hit particularly hard last week after the midterm elections, as Democrats won sweeping majorities in both houses of Congress, and dozens of ballot measures passed that could make building data centers more difficult. Healthcare is a smaller business at Nvidia, and the company makes chips for medical devices and MRI machines, but they are a minor in comparison to revenue from its advanced AI systems and graphics processing units, or GPUs.

Powell's role at Nvidia

Powell joined the company in 2008 and has been leading the healthcare group since 2017. In recent appearances, including at the company's annual GTC conference, Powell has spoken about how Nvidia's AI technology can help accelerate drug discovery, assist providers and improve clinical efficiency. Powell's bio on the Nvidia website says she is responsible for the company's worldwide healthcare business, including hardware and software platforms for accelerated computing, AI, and visualization that power the ecosystem of medical imaging, life sciences, drug discovery, and healthcare analytics.

Sources: cnbc.com · techmeme.com · techmeme.com · tomshardware.com