Nvidia Corp. co-founder Jensen Huang has resigned as president, chief executive officer and board member with immediate effect. The resignation follows days of mounting pressure over his admitted extramarital affair and reports that he was the target of a foreign intelligence effort.
Chief Financial Officer Colette Kress will be interim CEO and will keep her role as executive vice president and CFO until the board names a permanent successor. The board has begun a search for a permanent CEO and will consider both internal and external candidates, the chipmaker said in a statement on Thursday.
Nvidia also named Harvey C. Jones its first-ever Chair of the Board. Jones has spent more than three decades as an entrepreneur, technology executive and venture investor, and was previously CEO and executive chairman of Synopsys.
“Colette has helped lead NVIDIA through a period of extraordinary growth and has a deep understanding of our business, customers, operations and financial position,” Jones said. He added that the board expects operations, customer commitments and the product roadmap “to continue without interruption.”
Kress said she was committed to “building on the extraordinary foundation Jensen created over the last 33 years.” She has been Nvidia's CFO since September 2013. Before that she spent nearly 25 years in finance roles at companies including Cisco and Microsoft.
The board thanked Huang for his “immeasurable contributions to the company and the industry.”
Market Reaction
Nvidia shares were down about 10% in US premarket trade after the announcement, extending losses for the week. The stock had already slid nearly 7% since Friday on the first reports about Huang's relationship. Bernstein downgraded the stock to market-perform and cut its price target to $200 from $400. Oppenheimer downgraded it and removed its price target.
How It Unfolded
On Nov. 8, Nvidia's board said it was starting an independent investigation after reports that Huang had been the target of a foreign intelligence effort. At the time, it said it had “no reason to believe that either national security or NVIDIA secrets were compromised.” The same day, Huang told employees in a message that he had been unfaithful to his wife, adding, “There is no excuse for what I did.” He did not name the woman.
The New York Times and Financial Times reported that US intelligence officials believe the woman, Alice Huang, an executive at Singapore-based Nvidia customer Megaspeed, was working for China's Ministry of State Security. On Nov. 10, the board's independent members hired former acting US Attorney for the Southern District of New York Joon H. Kim and law firm Wachtell, Lipton, Rosen & Katz to run the probe.
On Wednesday, the New York Times reported a second extramarital relationship, with Kimberly Powell, Nvidia's vice president of health care. The Wall Street Journal then reported that the board was preparing to remove Huang, and CNBC confirmed the board had met on Wednesday to discuss his future.
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