On Thursday, Nvidia shares tumbled by more than 7% in premarket US trading after a report clarified that the board of directors is set to oust co-founder and CEO Jensen Huang in the wake of disclosures regarding two illicit relationships, among them an involvement with a suspected Beijing agent.
The Wall Street Journal reported that Nvidia’s board is scheduled to convene as soon as Wednesday to discuss Huang’s future, and directors are also investigating whether the alleged ties resulted in conflicts of interest or left the firm vulnerable to security threats.
Earlier, Huang also admitted to an affair with Alice Huang, and a Chinese businesswoman alleged to have links to Chinese intelligence. US officials are investigating whether the connection allowed confidential corporate or technical data to be shared with China.
Nvidia’s directors have initiated an autonomous inquiry with the support of external attorneys. The company has explained it has no reason to believe that trade secrets or national security information has been exposed.
Regarding the ongoing situation, analysts at brokerage Yorkville Ives said in a note, “ In our view the writing is on the wall that Jensen’s days at Nvidia could be numbered and we would expect this to be a very fluid situation over the next 48 hours.”
“We believe Nvidia’s value is $300 per share with Jensen as CEO and $225 per share without Jensen as CEO […] the reality is it’s a dark day for Nvidia, but the company will navigate this turmoil and get through to the other side and remain a core foundational piece of the AI Revolution.”
