Sen. Cramer calls on Nvidia CEO Jensen Huang to resign

Sen. Kevin Cramer of North Dakota, a senior Republican on the Senate Banking Committee, has called on Jensen Huang to step down as chief executive of Nvidia ↗ 4.39%. Cramer pointed to Huang's admitted affair with a businesswoman whom U.S. officials suspect of spying for Beijing. "The potential for extortion is so tremendous that something as sensitive as Nvidia chips, I just think he's got to go," Cramer told Politico late Tuesday, November 10.politico.com

Cramer is the first sitting senator to publicly demand Huang's resignation. Lawmakers in both parties are also pressing for federal and congressional investigations, according to Forbes and Reuters Thomson Reuters Corporation ↗ 0.59%.forbes.com+1

Growing pressure in Washington

Cramer said that even if infidelity were the worst thing Huang had done, "that's enough, because whatever else there is, we don't know. And to me, that's a security risk." He called the board's internal investigation "fine, but not nearly enough," Politico reported. His comments came hours after former National Economic Council director Larry Kudlow said "Step down Mr. Huang, right now" on his Fox Business ↗ 0.07% show.politico.com

Sen. Chris Coons, a Delaware Democrat expected to chair the Senate Foreign Relations Committee next year, said he is "pushing to investigate" Huang and Nvidia to find out whether national security was compromised. The Republican chairs of the House Foreign Affairs, Intelligence and China committees have asked Huang to attend a closed-door briefing on November 18. President Donald Trump said the FBI is looking into the matter but added that he expects Huang to be in "good shape".bbc.com+2

Stock rebounds after steep losses

Nvidia shares rose in early trading on Wednesday, according to Barron's News Corp ↗ 0.54%. The gain followed a 24% decline over the past month. The same day, Baird analyst Tristan Gerra downgraded the stock to Neutral and cut his price target to $200 from $500. Gerra suggested a new CEO might be needed to rebuild trust. Forbes reported that Nvidia lost about $430 billion in market value after Sunday.barrons.com+1

The scandal so far

In an employee memo on Sunday, November 8, Huang acknowledged he had been "unfaithful" to his wife. The admission followed a New York Times ↘ 0.17% report that U.S. intelligence believed Alice Huang, an executive at Singapore-based Megaspeed, was a Chinese intelligence asset. The report also said she helped steer advanced chips to China. Beijing has rejected the spying allegations.afp.com+1

Nvidia's independent directors hired former acting U.S. Attorney Joon H. Kim and the law firm Wachtell, Lipton, Rosen & Katz to lead an investigation Comcast Corporation ↗ 0.20%. The board said it has no reason to believe that national security or company secrets were compromised. Nvidia has said Huang "is committed to continuing to lead NVIDIA as CEO without interruption".nbcnews.com+1