Jensen Huang steps down as Nvidia CEO amid infidelity and espionage scandal

Jensen Huang, the founder of Nvidia, the world’s largest chipmaker, had the world at his feet after reaching the very pinnacle of success. But on Thursday, the businessman — one of the richest people on the planet — stepped down as chief executive of Nvidia following revelations that he had affairs that may have compromised the company’s security. The scandal has reverberated all the way to the White House and threatens to shake the artificial intelligence industry.Nvidia’s board of directors had been considering replacing Huang after discovering his affairs with two women, one of them a suspected Chinese spy and the other an employee who worked under his supervision. It is not clear whether Huang resigned voluntarily or was forced out.The story of Huang, who was born in Taiwan 63 years ago and raised in the United States, has all the ingredients of a Netflix series: power, sex and espionage. A tech magnate at the helm of the world’s most valuable technology company carried on an affair with an alleged Chinese spy while simultaneously lobbying the White House to change its trade policies toward Beijing.In broad terms, that is the story at the heart of the scandal surrounding Huang, founder of Nvidia, until recently the world’s most valuable company by market capitalization and the linchpin around which the entire artificial intelligence industry revolves. His influence in the technology sector turned him into a celebrity and allowed him to position himself as the key figure straddling two worlds: Asia and the United States. He was the link where the commercial interests of Washington, Beijing, Taipei, Seoul, Singapore and Tokyo converged.Market routThe scandal has taken a heavy toll on Nvidia’s market value. The company has lost a third of its valuation, equivalent to $1.8 trillion, since the story first broke. Shares fell about 8% in after-hours trading on Wednesday. Major shareholders, eager to stem the bleeding, pressed the board to remove Huang before Nvidia’s decline dragged down other companies across the sector.The final blow to Huang, Nvidia’s chief executive and largest individual shareholder with a stake of nearly 4%, came on Wednesday, a public holiday in the United States for Veterans Day. The New York Times revealed that Huang, long regarded as a rock-star figure in the technology industry, had also been involved in a relationship with Kimberly Powell, Nvidia’s vice president of healthcare. According to the newspaper, the two were seen behaving affectionately at a hotel in San Jose, California, after attending a developers’ conference in March.From there, events moved quickly, culminating in the ousting of a technology leader who until recently seemed untouchable. With a devoted following, Huang drew crowds because of both his wealth and Nvidia’s relentless success. He was widely seen as an industry guru. Dressed in his trademark black leather jacket, he posed for photographs with admirers like a Hollywood celebrity and traveled the world speaking at developers’ conferences. A few months ago, one fan asked him to sign her chest. He did not hesitate to do so.The Nvidia scandal erupted 10 days ago when it emerged that Huang had been engaged in an extramarital relationship with Alice Huang, a Chinese businesswoman who headed Megaspeed, a company alleged to have passed information about Nvidia and U.S. artificial intelligence policies to authorities in Beijing. Huang soon acknowledged the affair, while Nvidia’s board launched an investigation to determine the circumstances and scope of the matter.Alice Huang, also known as Huang Le, ran Megaspeed, a Singapore-based company accused of purchasing millions of dollars’ worth of advanced Nvidia chips and smuggling them into China. In doing so, it allegedly circumvented Washington’s restrictions on technology exports to Beijing amid the intensifying race for supremacy in artificial intelligence.The scandal was particularly sensitive given Huang’s close ties to U.S. President Donald Trump. Trump had brought the Nvidia chief executive on as a special adviser on artificial intelligence matters, regularly inviting him to the White House and including him on overseas trips focused on trade issues. Huang accompanied Trump on a visit to South Korea last autumn and again during a diplomatic trip to Beijing in May, where the U.S. president met with Chinese leader Xi Jinping.Trump drawn into the scandalU.S. intelligence agencies warned Trump at least twice about the existence of a Chinese spy linked to Nvidia. The first warning came a year ago, ahead of his trip to South Korea to meet Xi Jinping. At the time, Huang was lobbying Trump to partially lift restrictions on semiconductor sales to China. After months of negotiations, Nvidia secured an exemption allowing it to sell chips to a limited number of Chinese companies. The second warning came in a report personally overseen by Secretary of State Marco Rubio, which cautioned senior White House officials that the Chinese operative was involved in a potentially compromising intimate relationship with Huang.Trump said this week that he did not recall the briefings. Speaking at a press conference on Monday, he denied knowing the details of Huang’s relationship and revealed that an investigation had been opened. “We’ll look into it, I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape,” he said.Trump also acknowledged calling the businessman to ask whether he knew his partner was a spy. “He said, ‘I had no idea she was a spy,’ and I really believe him,” Trump recounted.Corporate governanceHuang’s departure from the company will not be straightforward. He founded Nvidia in 1993 after a lunch with two friends during which they concluded that new chips would have to be developed to improve graphics cards if video games were ever to become more realistic. Since then, the company has grown at a dizzying pace to become a cornerstone of the artificial intelligence industry thanks to its cutting-edge microprocessors. Nvidia’s chips are designed in a way that makes them particularly effective for training AI models. The company dominates the market for data-center semiconductors, and Huang has exercised near-total control over that business.Over the years, Huang imposed a highly personalized management style that complicated the question of succession. The company has no clear succession plan, and his approach to leadership, which saw his children, Madison and Spencer, as well as his son-in-law, Nico Caprez, installed in senior roles, exposed governance weaknesses at one of the world’s three most valuable companies. A skilled negotiator, Huang also built a chip supply chain over which he wielded extraordinary influence.Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition