Nvidia’s Jensen Huang resigns; CFO Kress named interim CEO

Jensen Huang has resigned as president, chief executive and board member of Nvidia, effective immediately, the company's board announced Thursday. Chief Financial Officer Colette Kress will serve as interim CEO and keep her CFO role until the board names a permanent successor. The board says it will consider candidates from inside and outside the company. Huang co-founded the chipmaker 33 years ago and built it into a company worth roughly $4 trillion that powered the artificial intelligence boom, CNBC reported.nvidianews.nvidia.com+1

The decision came during an investigation into Huang's affair with a woman U.S. intelligence agencies suspect of spying for China, CBS News reported. Nvidia's announcement did not say why he resigned, according to Axios.cbsnews.com+1

A new board structure

The board also named Harvey C. Jones, a former CEO and executive chairman of Synopsys, as its first-ever chair. "The Board has full confidence in Colette and the leadership team, and we expect the company's operations, customer commitments and product roadmap to continue without interruption," Jones said in the company's statement. Kress joined Nvidia in 2013 after nearly 25 years in finance roles at Cisco and Microsoft. She said she is "committed to building on the extraordinary foundation Jensen created." Nvidia still plans to report its fiscal third-quarter results on Tuesday, November 17.nvidianews.nvidia.com

Nvidia shares fell more than 10% after the resignation was announced, Axios reported. Before that, Bernstein had cut its price target on the stock in half, from $400 to $200, according to CNBC.cnbc.com+1

How the scandal unfolded

Huang, 63, admitted in a memo to employees on Sunday, November 8, that he had been unfaithful to his wife. He gave no details about his relationship with Alice Huang, a senior executive at Megaspeed, a Singapore-based Nvidia customer, NBC News reported. Megaspeed and related firms are under U.S. criminal investigation over allegations that they smuggled American chips into China. China has called the spying claims "purely unsubstantiated." The board hired former acting U.S. Attorney Joon Kim and the law firm Wachtell Lipton to lead the investigation, Anadolu Agency reported. At the time, the board said it had "no reason to believe" national security or company secrets had been compromised.nbcnews.com+1

Pressure built on Wednesday, November 11, when The New York Times reported that Huang also had a relationship with Kimberly Powell, a health care vice president who reported to him. The board met that night to decide his future, Reuters reported. Senators Kevin Cramer and Chris Coons were among the lawmakers who had called for a resignation or an investigation, Forbes reported.miamiherald.com+1

A gap at the top of the AI industry

Huang has no obvious successor, and he owns about 3.6% of Nvidia's stock, according to Reuters. "He's Mr. AI. He speaks for the industry," Jeff Christian, CEO of the executive search firm Christian and Timbers, told CNBC. Bernstein analyst Stacy Rasgon said it was unclear who could lead Nvidia next. "Who is the right person now to make the decisions for the next 10 years? I don't intuitively know who that person would be," he said.cnbc.com+2