Nvidia shares fall 13% after Jensen Huang resigns
Chief financial officer Colette Kress is interim chief while the board weighs successors including co-founder Chris Malachowsky and Arm's Rene Haas.
Nvidia chief executive Jensen Huang resigned on Thursday over reports of extramarital affairs, one of them with a woman suspected of being a Chinese spy, the BBC reported. The chipmaker's shares opened more than 13% lower in New York, wiping more than half a trillion dollars from its market value.
Chief financial officer Colette Kress is running the company in the interim. Anadolu Agency reported that Kress, who is also executive vice-president and has held senior roles at Cisco and Microsoft, becomes the first woman to lead the chipmaker while the board looks for a permanent chief executive.
Huang co-founded Nvidia more than three decades ago with Chris Malachowsky and Curtis Priem and built it into one of the world's most valuable companies. Its processors are widely regarded as the standard for artificial intelligence development, and they are manufactured with the help of Taiwan's TSMC and South Korea's SK Hynix and Samsung.
Malachowsky is the only executive at the company with the same seniority as Huang and played a central part in developing its computing technology, the BBC reported. Ian Buck, who oversees high-performance computing, is another internal option if the board wants an engineer in the job.
Charu Chanana, an investment strategist at Saxo, said Buck "could protect Nvidia's technological edge, but his ability to manage the wider commercial relationships and geopolitical challenges would face scrutiny".
Names from outside the company have also been floated. Jun Bei Liu, founder of Ten Cap, suggested Tim Cook, Apple's former chief executive and now its chair, and Rene Haas, chief executive of UK chip designer Arm Holdings. Haas would bring semiconductor experience, but Nvidia's business model differs considerably from Arm's, Chanana said.
Josh Gilbert of eToro said Kress had fronted every earnings call alongside Huang and was "a familiar and trusted voice for the market at a time when it badly needs one". Gilbert said a permanent appointment might still go to an engineer.
Investors moved quickly. Several major investment firms cut their forecasts for Nvidia, and Stacy Rasgon, senior analyst for US semiconductors at Bernstein Research, halved his firm's share price target, writing that "we probably haven't fully probed the depths of what might be found here" and that "we've had enough and prefer to watch from the sidelines".
Liu said the question was no longer only personal conduct. "It is about corporate governance, national security concerns and maintaining confidence in the leadership of one of the world's most strategically important companies," she said.
Ray Wang, chief executive of Constellation Research, said the crisis was less a problem for the AI industry than for Nvidia itself, because many of its partnerships and investments were made on trust in Huang.
How the reports differ
BBC News led with the market and with the allegation: it reported the 13% opening fall, the half-trillion dollars of value lost, and that one of the affairs was with a woman suspected of being a Chinese spy. The BBC also named Chris Malachowsky, Ian Buck, Rene Haas and Tim Cook as possible successors and carried analyst comment on each. Anadolu Agency led with a profile of Kress, saying she is the first woman to lead the chipmaker and crediting her with steering its finances through the AI boom, while Reuters framed its report around the question of who the interim chief executive is.
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