Nvidia Slides More Than 9% After Hours on Report Board Is Preparing to Oust Jensen Huang

Nvidia shares slid more than 9% in after-hours trading after a report said the company is preparing to oust Chief Executive Officer Jensen Huang. The stock had risen in the regular session along with a rebound in semiconductor shares, but selling surged after the close as the prospect of a management shake-up emerged.

Fortune reported on Nov. 11 that Nvidia is preparing a plan to remove Huang, and that the board could meet as soon as that day to decide his future. His dismissal has not been formally approved, however, and it remains unclear what role he might hold at the company afterward.

Huang acknowledged an extramarital affair on Nov. 8 and apologized to his family and employees. Nvidia's board launched an independent investigation after reports said he had become a target of a foreign intelligence operation. At the time, the board said it had found no evidence that U.S. national security or company secrets had been compromised, while adding that it would review all available information.

Additional allegations surfaced on Nov. 11 that Huang had also been involved in an extramarital relationship with Kimberly Powell, Nvidia's vice president for healthcare. Powell is a senior executive who has spent about 20 years at the company. Fortune said it sought comment from Powell but did not receive an immediate response.

The possibility of Huang's departure is also deepening uncertainty over succession. Huang, who co-founded Nvidia in 1993, has led the company for 33 years, with about 60 people reporting directly to him and major decisions concentrated around the CEO. Nvidia has not disclosed a clear succession plan.

Gil Luria, an analyst at D.A. Davidson, said the situation is "accelerating a leadership transition the company was not prepared for." A key question now is whether Nvidia can establish a management structure capable of carrying forward the product strategy and the customer and partner relationships Huang has led.