Nvidia board meets to decide CEO Jensen Huang's future amid affairs reports
Nvidia's board is meeting to decide whether to oust CEO Jensen Huang after reports of extramarital affairs. Analysts warn of short-term stability but long-term uncertainty over succession and strategic vision.
Nvidia's board is meeting on Wednesday to decide whether to oust CEO Jensen Huang, a source familiar with the matter told Reuters, as the world's dominant supplier of AI processors grapples with reports of two extramarital affairs involving its longtime leader. Nvidia did not immediately respond to a request for comment on the board meeting. The Wall Street Journal reported on Wednesday that Nvidia's board is preparing to oust Huang, citing people familiar with the matter.
Market analysts offered mixed reactions. Shay Boloro, chief market strategist at Futurum Equities, said the market needs to separate a leadership crisis from Nvidia's actual business. "Blackwell demand, the Rubin roadmap, networking expansion and CUDA ecosystem were already firmly established long before this fiasco, so I don't see the next 12 to 18 months of revenue suddenly disappearing if Jensen were to leave." However, he warned that Huang's departure would be a challenge for the next decade because he has consistently identified where computing is going before customers realise they need it.
Jun Bei Liu, lead portfolio manager at Ten Cap, said Huang is the face of Nvidia and the company has been front and centre of the AI build-out. "I actually think it has quite a meaningful ramification for what is to come. Are they still going to give that much funding? Is neocloud still going to be a focus for them? There's just a lot of uncertainty to come ... not just for Nvidia, it's for the whole AI, the circular financing, the AI build-out, all the businesses that they co-invest and sponsor."
Nick Twidale, chief market analyst at Avafx Global, said he expects to see Huang leave the company and that the board is probably going through a negotiation process while working a strong PR angle to give investors confidence. "I think the initial reaction to his resignation will be a further hit to the share price … although we have it well priced in at the moment." Charu Chanana, chief investment strategist at Saxo, said investors now need to put a higher probability on the risk of a leadership change, creating fresh uncertainty about Nvidia's business plans, especially in China.
Josh Gilbert, lead analyst at Etoro, noted that the market has only ever known Nvidia with Huang in charge. "None of this changes how many chips the big tech names want to buy, but investors want certainty at the top as much as they want growth, and right now Nvidia can only offer one of those." Jake Dollarhide, CEO of Longbow Asset Management, said the situation looks bad from every single angle. He believes the board will not oust Huang until they have an all-star known entity in the tech sector to replace him.
Chris Weston, head of research at Pepperstone, said Huang is the man who has all the relationships to the Chinese, Japanese and Koreans. He expects a successor to have similar relationships and that the transition will be fairly seamless. "What you're also seeing is a move higher in the after-hours prices in AMD and Broadcom. So, market share is clearly going to get picked up by those other producers." Gil Luria, managing director at D.A. Davidson & Co, said Huang being removed immediately could be challenging since Nvidia does not have a succession plan in place. Bruce Zaro, managing director at Granite Wealth Management, questioned whether someone can step up and be the ambassador that Huang has been with data centres.