Nvidia co-founder Jensen Huang has stepped down as the company’s President, Chief Executive and board member, ending a 33-year tenure at the technology giant amid reports of alleged extramarital relationships and concerns surrounding a business associate accused of links to Chinese intelligence.
Nvidia shares fell by as much as 13 per cent in early Wall Street trading following the announcement.
His exit comes after reports emerged about his relationship with Alice Huang, a senior executive at Singapore-based data centre company Megaspeed, who has reportedly been accused in a US intelligence assessment of acting on behalf of China’s Ministry of State Security.
The controversy intensified on Wednesday after a news paper reported that Huang had also been involved in a relationship with another Nvidia executive, Kimberly Powell, who serves as the company’s Vice President of healthcare.
Huang co-founded Nvidia in 1993 and led its development into one of the world’s most influential technology companies, particularly through its graphics processing units and artificial intelligence chips.
Huang reportedly acknowledged on Sunday that he had been involved in a relationship with Alice Huang, a senior executive at Megaspeed. The two individuals are not related.
US intelligence reportedly circulated a memo earlier this year alleging that Alice Huang, also known as Huang Le, was an operative for China’s Ministry of State Security. According to the reports, she was being monitored over concerns that she might have been involved in directing artificial intelligence chips to China.
Megaspeed operates data centres across Southeast Asia and has developed a prominent commercial relationship with Nvidia, becoming one of the chipmaker’s largest customers in the region. The allegations have raised questions about possible national security implications and whether any confidential information or restricted technology could have been compromised.
However, Nvidia’s board said it had “no reason to believe” that national security or the company’s proprietary information had been compromised. It also said a thorough independent investigation would be conducted.
Interim Chief Executive Named
Nvidia said that its Chief Financial Officer, Colette Kress, would serve as interim Chief Executive while the board considers candidates from within and outside the company for a permanent appointment. Kress will retain her finance responsibilities during the transition.
“NVIDIA’s strength has always come from its people, and together with our leadership team, I am committed to building on the extraordinary foundation Jensen created over the last 33 years.”
Colette Kress
Harvey C. Jones, a former Chief Executive of chip design software company Synopsys, has also been appointed as Nvidia’s first-ever board chair.
Jones also expressed confidence in the interim leadership arrangement. “The Board has full confidence in Colette and the leadership team, and we expect the company’s operations, customer commitments and product roadmap to continue without interruption,” he said.
The board said that it would consider both internal and external candidates as it searches for a permanent replacement. The company’s statement did not identify a succession candidate or provide a timeline for completing the process.
Megaspeed Pledges Cooperation With US Authorities
Megaspeed issued its first public statement on the controversy on Thursday, saying it took its obligations under US export control laws extremely seriously.
The cloud computing company said it had cooperated with the US Department of Commerce’s Bureau of Industry and Security (BIS), which oversees enforcement of restrictions on technology exports involving national security concerns.
It also pledged to cooperate fully with other relevant US government authorities. “Megaspeed is committed to working constructively and transparently with the U.S. government,” the company said in a statement signed by its Chairman and Chief Executive, Tan Yong Pong, also known as James Tan.
Megaspeed said that it had engaged a US law firm to conduct a comprehensive inventory of its computer chips and verify its compliance with export control requirements.
The company added that it welcomed appropriate government scrutiny and was committed to demonstrating that its operations complied with applicable US laws. “Megaspeed welcomes appropriate government scrutiny and is committed to demonstrating through concrete actions that it operates responsibly, transparently, and in accordance with applicable U.S. laws,” the statement said.
The company’s response comes amid wider scrutiny of the international distribution of advanced artificial intelligence chips, particularly concerns about the transfer of restricted technology to China.
Nvidia’s leadership transition therefore comes at a time when the company is facing questions extending beyond its executive structure to include corporate governance, export controls and the security of advanced semiconductor technology.
While Kress assumes temporary leadership, the board faces the task of identifying a permanent successor and maintaining confidence among investors, employees and customers as the investigations and reported allegations continue to draw attention.
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