Scandal-hit Nvidia CEO Jensen Huang quits, plunging AI chipmaking giant into turmoil

Jensen Huang has abruptly quit as chief executive of AI chipmaking giant Nvidia after revelations of alleged extramarital affairs, sending shockwaves from Silicon Valley to Capitol Hill.

Nvidia is now under scrutiny from US lawmakers in Washington DC demanding Huang answer questions over whether one of his alleged relationships was with a Chinese spy.

One of the world's most valuable companies as a result of the AI boom, Nvidia has lost $550bn (£415bn) in stock market value in just five days as the scandal dominated headlines.

Nvidia's interim CEO, Colette Kress, called an emergency meeting of her executive team to discuss the company's future.

His alleged conduct not only potentially crossed professional boundaries, but has made Nvidia the target of questions from US politicians who have expressed concern about national security risks.

Huang, who has been Nvidia's public face since 1993, admitted on Sunday to having been "unfaithful" to his wife after reports he had an extramarital affair with a suspected Chinese spy, Alice Huang (no relation).

On Wednesday, he was reported to have had a second relationship, this time with an Nvidia executive.

Alice Huang worked as an executive at the Singaporean firm Megaspeed. She has been suspected of being an intelligence asset for China, according to the New York Times. China has rejected those allegations as a smear.

And US Attorney General Todd Blanche said on Thursday the Department of Justice had not yet drawn any conclusions about Alice Huang was engaged in espionage for Beijing.

Senators Elizabeth Warren and Chris Coons, along with other Democrats on the House Foreign Affairs Committee, publicly demanded that Huang brief Congress on his alleged affair.

If he refuses to appear voluntarily before any committee that calls him, he could be subpoenaed, one Senate staff member told the BBC.

Representatives of Nvidia have repeatedly declined to comment since Wednesday. A personal representative of Huang also declined to comment on Thursday.

According to US media, Huang's alleged second affair was with a long-time Nvidia executive, Kimberly Powell, who reported directly to him within the company.

Sources have told the BBC that Nvidia employees had noticed the pair were unusually close.

Huang had been widely expected to weather the scandal after the first affair became public, even as Nvidia announced it had launched an investigation into whether its CEO had been "the target of a foreign intelligence effort".

One current Nvidia staff member told the BBC that the initial reports of his infidelity were more or less brushed off by rank-and-file workers inside the company.

It wasn't until Huang's alleged affair with the Nvidia executive became public that workers started to feel "this is crazy", the person said.

Another Nvidia employee said they had been told not to speak with the press or otherwise comment on the situation in public.

Many staff have earned millions of dollars in compensation through their ability to cash out their Nvidia shares as the stock soared.

Nvidia has said it has "no reason to believe that either national security or Nvidia secrets were compromised", but pledhed that its independent inquiry would look at all available information.

The company's meteoric rise had been led by Jensen Huang, who became a major booster of the AI industry, which relies on Nvidia for the powerful computer chips it manufactures.

Initially those chips were designed for computer gaming.

But as AI technology evolved in the last four years into chatbots and large language models, companies building AI tools suddenly required huge numbers of the Nvidia computer chips that could process large amounts of data.

Nvidia is now hunting a permanent replacement for Huang. Chief Financial Officer Colette Kress was named on Thursday as interim CEO.

Several tech insiders that the BBC spoke with this week noted that Huang's downfall has been a major topic of conversation in Bay Area circles, an area that is filled with tech employees, industry executives and billionaires.

"Obviously, his behaviour has compounded over time," one long-time tech industry executive said, noting that other executives had experienced public issues of infidelity that could have been avoided.

Bill Gates of Microsoft and Jeff Bezos of Amazon had affairs exposed in the last decade. Both men are now divorced from their wives.

Huang has been married to Lori Huang for 40 years. Both of their children are also executives at Nvidia.

The tech executive added that the overall feeling among people discussing Huang's affairs was that "stuff will keep coming out."

Nvidia's stock fall this week is the most significant five-day drop the company has seen since going public 27 years ago.

The company's market value rose by more than 470% in the past five years, with its stock peaking just a few weeks ago. It is now down by 31% against a backdrop of wider uncertainty in the tech sector.

Because of Nvidia's size and success in recent years, such a drop can have a direct impact on the savings accounts of ordinary Americans.

Nvidia's value makes up about 7% of the S&P 500 index, for instance. That index is offered as a popular index fund in 401ks, which are retirement savings accounts.

Those account balances rise and fall with the changes of the stock market.