Nvidia’s board of directors is reportedly preparing to remove Jensen Huang as chief executive, according to The Wall Street Journal, following revelations about two extramarital affairs, one of which involved a woman suspected of spying for China. Meanwhile, The New York Times has revealed further details about the Nvidia chief executive’s alleged relationship with a senior colleague who reports directly to him, as the developments put pressure on shares in the US semiconductor giant.

According to sources familiar with the developments cited by The Wall Street Journal, Nvidia’s board is preparing to meet to decide the future of the company’s founder and chief executive.

The report states that the meeting could take place as early as Thursday, as pressure mounts on Huang following successive revelations about his private life and their potential implications for corporate governance and US national security.

Second alleged affair with a senior Nvidia executive

The New York Times has added a new dimension to the controversy, reporting that Jensen Huang allegedly had an extramarital affair with Kimberly Powell, Nvidia’s vice-president responsible for healthcare, who reports directly to the company’s chief executive.

According to the report, which cites five people who have worked at Nvidia, Huang, 63, and Powell, 48, who are both married to other people, allegedly had a personal relationship.

Two sources claimed that the pair were seen behaving affectionately at a hotel in San Jose during an Nvidia conference last March.

Their interaction was reportedly captured on video by an attendee, with witnesses alleging that Huang’s security personnel separated the person who made the recording from others and offered them a non-disclosure agreement (NDA) to sign.

The video has not been independently verified by the media outlets reporting the allegations.

Powell joined Nvidia in 2008 and has played a significant role in expanding the company’s operations in healthcare and life sciences, including artificial intelligence applications in medical imaging and drug discovery.

The new allegations raise questions about compliance with Nvidia’s code of conduct, which requires employees to avoid conflicts of interest, including those arising from personal relationships within the company.

According to Investing.com, when Huang was asked to comment on the allegations, he did not provide a substantive response. Nvidia declined to comment, while Powell did not immediately respond to enquiries.

Earlier revelations involving a suspected Chinese spy

The latest allegations come just days after revelations that Jensen Huang had a personal relationship with Alice Huang, a former senior executive at Megaspeed International whom US intelligence agencies reportedly suspect of collaborating with Chinese intelligence.

Alice Huang, who is not related to Nvidia’s chief executive, allegedly passed information to Beijing while working with Nvidia on data centre construction projects in Asia.

Following the revelations, Huang admitted that he had been unfaithful to his wife and apologised to his family, employees and the company.

Nvidia’s board announced an independent investigation to establish whether its chief executive had been targeted by foreign intelligence services.

The company has clarified that it has no evidence that corporate secrets were compromised or that national security was endangered.

China has dismissed the espionage allegations as unfounded.

Nvidia shares come under pressure

The latest revelations prompted an immediate reaction in financial markets.

Nvidia shares fell approximately 3% in after-hours trading on Wednesday following the publication of reports about Huang’s alleged relationship with Kimberly Powell. According to Axios, the decline reached nearly 5% at one point.

The development adds to the pressure on Nvidia shares following the disclosure of Huang’s earlier relationship and the launch of an investigation into a possible espionage attempt.

Beyond the allegations concerning Huang’s private life, the controversy has raised questions about corporate governance procedures, potential conflicts of interest and succession planning at Nvidia, where Huang has played a pivotal role since the company’s founding.

No decision to remove Jensen Huang has been announced so far, with The Wall Street Journal reporting that the board is considering his future.

Who could succeed Jensen Huang?

The prospect of Huang’s departure has caused considerable concern among investors, as Nvidia has not publicly disclosed a clear succession plan.

The 63-year-old entrepreneur has been instrumental in transforming Nvidia from a graphics processing unit manufacturer into one of the world’s most important companies in artificial intelligence.

According to Armina Rosenberg, portfolio manager and co-founder of Australian hedge fund Minotaur Capital, Nvidia’s chief financial officer, Colette Kress, is a potential candidate to take over as interim chief executive if Huang leaves.

“Colette Kress would be the natural choice for interim chief executive. She has been chief financial officer for more than a decade, is one of the most capable executives we have encountered, and the market knows and trusts her,” Rosenberg said.

However, she stressed that the greater challenge concerns the company’s long-term technological strategy.

“The more difficult question is who will lead the technology strategy in the long term, because Nvidia has never prepared a successor.”

Bruce Zaro, managing director at Granite Wealth Management, expressed similar concerns, pointing out that Huang was the person who had guided Nvidia’s remarkable rise.

“The question is whether someone can step in if Jensen has to resign or is forced out,” he said.