Nvidia’s Jensen Huang and Troubling Rise of the Imperial CEO

Jensen Huang resigned Thursday as chief executive of Nvidia, a company that he co-founded in 1993 with the modest goal of creating 3D graphics for video games, but which now dominates the global market for the advanced graphic processing units that power AI. Nvidia’s shares were, according to one September calculation, 8 percent of the entire S&P 500. Lately, they’ve slipped below 6 percent, but that’s still gargantuan. Under the best of circumstances, it’s very difficult to force out the chairman of a company making this kind of money for its shareholders. Huang made it even harder by eliminating potential sources of accountability.Some will conclude Huang’s resignation shows that America’s system of corporate governance works, but that’s the wrong lesson. Huang kept his job long after it became evident to pretty much everyone working at Nvidia that he was abusing his executive power. What his story really illustrates is that big-shot tech chiefs—Huang, Mark Zuckerberg, Elon Musk, and Anthropic’s Dario Amodei come most readily to mind—tend to amass so much wealth and power that they make themselves almost impossible to fire. These corporations are, in effect, hostage to the merchant princes who run them.Huang’s resignation wouldn’t have occurred, or anyway wouldn’t have occurred this week, without The New York Times reporting Thursday that he was caught on video last March canoodling during a company meeting with Nvidia’s vice president of health care. This came after Huang confessed Sunday to conducting an extramarital affair with Alice Huang (no relation), who, as the Times revealed last week, is a suspected Chinese spy. Conceivably Huang didn’t know this about her, but as the corporate governance expert Nell Minow pointed out to me, Huang was certainly aware that the company Alice ran, Megaspeed, was Nvidia’s biggest customer in Southeast Asia, making any such relationship, even if consensual, a violation of corporate ethics and potentially a violation of securities law. It would not astonish me to learn that Huang turned a blind eye to, or even collaborated with, his paramour’s alleged diversion of Nvidia AI chips to China, which the Times reported on more than a year ago. (Huang denies the diversion took place). The filing of class-action lawsuits has already begun.“If involved in a situation that could present a perceived or actual conflict of interest,” the Nvidia ethics manual advises, “contact Employment Legal for guidance.” Had Huang followed his own company’s policies and confessed to Employment Legal that he was bumping uglies with a Nvidia customer and snogging with a Nvidia employee, he undoubtedly would have been told not to fish off the company pier. Insinuations that Nvidia’s chief executive had an affair with Alice Huang have been public for more than a year. If Nvidia’s board never asked Huang about it, then the company was hostage to Huang to a greater degree than I think. More likely, it did ask; Huang lied; and the board pretended to believe him because to do otherwise would tank Nvidia’s stock. Which is exactly what happened after the Financial Times confirmed the affair. As I write, Nvidia has lost about $1 trillion in value, lending weight to Bloomberg’s Matt Levine’s observation that this is “the most expensive extramarital affair in human history.” We know that Huang lied about Alice last month to Bloomberg, saying, “Our relationship, our interactions, have been related to Megaspeed, and it was all completely normal and not unusual.” For at least as long, Nvidia company spokespeople have denied that Jensen and Alice were knocking boots.We don’t know whether the board knew that Huang also got caught spooning with Nvidia’s Kimberly Powell (the Times used the term “being affectionate”) at a San Jose hotel where Nvidia employees stayed while attending Nvidia’s annual developer conference. A bystander recorded this on a cell phone; Huang’s security team observed the surveillance; and the security team then “sequestered the person,” the Times reported, and “asked the person to sign a nondisclosure agreement.” The Times doesn’t relate whether this person signed the agreement. But assuming they were a Nvidia employee (I don’t see how Huang’s security team could “sequester” somebody who wasn’t), merely asking that person to remain silent would violate California’s 2021 Silenced No More Act. In any event, the video’s existence did not remain confidential, and the Times got confirmation of the smooch from no fewer than five Nvidia employees, suggesting that Huang’s brazen behavior was common knowledge at Nvidia, even perhaps to the board. Suppressing such information might also constitute securities fraud. In addition, Reuters reported yesterday a third “intimate relationship” with yet another Nvidia employee, this one unnamed. It isn’t clear how many people knew about that.Why was Huang allowed to misbehave for so long, and why did so many people risk legal reprisals to protect him? Board members fearing a drop in the company’s stock price is only part of the story. Nvidia’s governance structure is a nightmare. Until Thursday, the company never had a board chair. Huang made sure there was no succession plan, and three years ago Huang said he expected to run Nvidia three or four more decades, by which time he would be aged 90 or 100. More than 60 Nvidia employees reported directly to Huang, and last year Huang claimed, “I probably read several thousand emails a day.” If you go to Nvidia’s website and click on “management team,” you’re shown a grand total of four company officers, one of whom, Colette Kress, was just named interim chief executive. What until recently was the world’s wealthiest company was managed like the corner drug store. The financial world rushed to defend Huang after he admitted his affair with Alice. “I believe Jensen is irreplaceable for America’s AI leadership,” Shaun Maguire, a venture capitalist at Sequoia Capital, posted on X on November 8. “We should all support him and his family,” Bill Ackman posted. Ackman later added, “If indeed this is more than an affair, then it is an [sic] obviously a real problem,” failing to grasp than even without the espionage angle Huang’s affair with a leading Nvidia customer was a firing offense. Gavin Baker, managing partner of the investment firm Atreides Management, tweeted, “It would be a disaster for America—and a gift to China—if Jensen goes down.” After Huang resigned on Thursday, Musk tweeted that it “would be an honor” to hire him. If nothing else, Huang’s resignation should serve to educate Wall Street that the planet doesn’t explode when the chief executive of a company valued at more than $5 trillion is forced to resign. But Huang is not the only chief executive to assume excessive control over a corporation by selling his board on his infallibility. Mark Zuckerberg, as I explained last month, turned California’s billionaire wealth-tax ballot initiative, which failed last week, into an opportunity to extort a raise from his board. The raise was not an increase in compensation per se but rather an increase in liquidity; Meta created a new class of non-voting stock that had the effect of maintaining Zuckerberg’s control of 61 percent of all voting shares even if he were required to pay the state of California 5 percent of his net worth, which he won’t be. Zuckerberg persuaded the board not to condition this change on Proposition 40’s passage, which already seemed a pretty bad bet when Zuckerberg cut the deal. The arrangement had the effect of diluting Meta’s accountability to shareholders who weren’t Mark Zuckerberg.Zuckerberg got what he wanted by threatening to move out of the state to avoid the tax. This was a transparently nonnsensical scenario because the wealth tax was structured in such a way that it was already too late for Zuckerberg to avoid it. But the threat so jangled Meta’s board that it gave away the store. Never mind that Zuckerberg’s stewardship of Meta in recent years has been less than stellar; his infatuation with the virtual-reality “metaverse” cost his company $85 billion.Elon Musk famously extracted a $139 billion pay package from Tesla’s board outrageous enough to prompt a Delaware judge to throw it out on the grounds that it didn’t represent a good-faith negotiation, largely because Musk packed the board with personal friends. The ruling was overturned in December 2025. By then it was evident that Musk’s participation in DOGE had damaged Tesla sales. Tesla’s board nonetheless granted Musk that year another pay increase potentially valued at $1 trillion that could give him 25 percent voting control at the company. Musk had previously threatened to develop AI technology outside Tesla if he didn’t get it, which I find difficult to reconcile with a chief executive’s fiduciary duty to the company he runs.“We live in the Age of the Imperial CEO,” The Wall Street Journal’s Tim Higgins wrote last month, citing Zuckerberg’s shakedown and Musk’s 85 percent voting control of yet another company, Space X. Higgins also cited the structure of Anthropic’s forthcoming IPO, which gives founders Dario and Daniela Amodei, along with five other investors, majority control so long as three of the seven remain. It’s a sort of tontine that could last for decades, provided AI doesn’t kill us all before then. (For an exegesis of the tontine I refer you to Robert Lewis Stevenson’s 1889 novel The Wrong Box and the hilarious 1966 movie that Bryan Forbes made from it with Peter Cook and Dudley Moore.) Huang’s departure won’t likely destroy Nvidia because no matter who runs the company it still controls somewhere around 80 percent of its market. Even if Huang is a genius, it would take someone at least as dumb as Huang is smart to run this company into the ground. One hopes the lesson will be that it’s a very big mistake for corporate boards to yield so much power to chief executives. But don’t count on them noticing.