The company's shares fell around 8 per cent in after-hours trading following the report. Including Wednesday's decline, Nvidia has lost nearly $600 billion in market value this week.
The controversy initially emerged following reports about Huang's relationship with Alice Huang, a Chinese businesswoman whom US intelligence has reportedly linked to facilitating shipments of Nvidia chips to Chinese companies.The allegations escalated on Wednesday after The New York Times reported that Huang had also been involved in an extramarital relationship with Kimberly Powell, Nvidia's vice president of healthcare, who reportedly worked under him. The newspaper cited five people who had worked at the company.
When contacted about the alleged relationship, Huang reportedly declined to comment, telling the newspaper, "I don't think you should be talking to me directly," before hanging up.Nvidia and Powell did not immediately respond to requests for comment. Reuters said it could not independently verify the report.LEADERSHIP UNCERTAINTY AT NVIDIAHuang's possible departure could create a major leadership vacuum at the chipmaker, which has no obvious successor in place.
He owns approximately 3.6 per cent of Nvidia's shares and maintains close control over the company, with dozens of executives reporting directly to him.Analysts have warned that an immediate removal could prove challenging given the absence of a clear succession plan."If Mr Huang broke the law or violated company policies, the board is likely to act as soon as they have proof," Gil Luria, head of technology research at D.A. Davidson, said.In a memo to employees on Sunday, Huang acknowledged being unfaithful to his wife and took "full responsibility", without providing details about the relationship.On the same day, Nvidia's board launched an investigation into whether Huang had been targeted by a foreign intelligence operation.
The inquiry is being overseen by independent directors with the assistance of outside legal counsel. The board had expressed confidence in Huang when announcing the investigation.US President Donald Trump has also voiced support for the Nvidia chief, describing him as "an honorable guy" who had "done an amazing job for our country".However, Huang could face further scrutiny in Washington.
He may be issued a congressional subpoena if he fails to respond to a request for a closed-door briefing regarding his alleged relationship with the Chinese businesswoman and claims that information was passed to Beijing.Meanwhile, Axios reported on Wednesday, citing senior sources, that US Commerce Secretary Howard Lutnick had stalled Trump's efforts to crack down on companies suspected of diverting Nvidia chips to China. The White House and Lutnick's spokesperson did not immediately comment.NVIDIA SHARES SLIDE, RIVALS GAINThe leadership uncertainty has also rattled financial markets, with US stock futures declining and Nasdaq futures falling around 1 per cent.In contrast, shares of rival chipmakers AMD and Broadcom rose approximately 4 per cent and 3 per cent, respectively, in after-hours trading, amid expectations that they could gain market share if Nvidia faces prolonged disruption.Analysts believe demand for Nvidia's AI processors is unlikely to weaken immediately.
However, concerns are growing over the wider ecosystem of companies and investments tied to the chipmaker.Nvidia has become central to the global AI investment boom, with its financing arrangements and investments supporting several companies that are also its customers.Nick Ferres, chief investment officer at Singapore-based Vantage Point Asset Management, warned that a slowdown could expose vulnerabilities in the broader investment cycle.Huang co-founded Nvidia in 1993 alongside Curtis Priem and Chris Malachowsky. The company initially made graphics processors for computer gaming before its CUDA software expanded their applications into general computing and eventually artificial intelligence.- Ends