Nvidia Reportedly Conducts Secret Search for New CEO, Meeting Today to Decide Jensen Huang's Fate?

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Original Source: Wallstreetcn

Nvidia is facing a severe crisis that could reshape the leadership structure of the world's most valuable AI chipmaker. As CEO Jensen Huang becomes embroiled in multiple extramarital affair scandals, the company's board of directors is actively searching for potential successors to prepare for a possible power vacuum.

According to Bloomberg and The Wall Street Journal, Nvidia's board held an internal meeting on Wednesday to decide Jensen Huang's fate and has partnered with external agencies to select new CEO candidates, including considering the appointment of a transitional chief executive. Previously, The New York Times disclosed that Jensen Huang had an inappropriate relationship with a direct subordinate, further intensifying earlier serious allegations of an affair with a Chinese woman.

(The above image was generated by AI)

Succession uncertainty quickly triggered violent reactions in financial markets. In after-hours trading on Wednesday, Nvidia's stock plunged as much as 9%, not only wiping out massive market value in a single day but also triggering widespread selling sentiment that dragged down other AI-related stocks such as Intel and Dell Technologies.

Polymarket data shows that the market's betting odds on Nvidia CEO Jensen Huang departing or being ousted have surged. Currently, the probability of Huang leaving before November 30, 2026 has risen to 86%; by December 31, 2026, it has climbed to 91%; by March 31, 2027, it has further risen to 92%; and by December 31, 2027, it has reached 93%.

As Nvidia is set to release its quarterly earnings next week, this series of sudden developments forces investors to confront an unprecedented "key person risk."

Wall Street is closely assessing what degree of direct impact the forced departure of the core architect of AI infrastructure would have on the entire AI industry's capital chain, customer confidence, and development prospects.

Independent Investigation and the Board's Major Test

According to Reuters, Nvidia's board launched an internal investigation on Sunday in response to national security concerns mentioned in news reports.

However, the company's governance structure is under strict scrutiny from the outside. Among Nvidia's 11 directors, there is no board chairman, and several independent directors (such as Mark Stevens) have served since the 1990s, resulting in a highly entrenched personnel structure.

Marc Goldstein, head of U.S. research at Institutional Shareholder Services (ISS), noted that while Wall Street typically grants Silicon Valley charismatic founders a certain degree of tolerance, the board must hire independent legal counsel to enhance the credibility of the investigation since Huang's own judgment has been called into question.

He suggested that the board consider recusing long-tenured directors from the investigation to guard against future legal challenges from shareholders. Former U.S. Department of Justice official Gil Soffer emphasized that if the investigation confirms that Huang concealed the relationship and engaged in misconduct, removing him would be an appropriate decision.

Key Question: Did Jensen Huang Voluntarily Disclose?

One of the core focuses of the investigation is whether Jensen Huang had disclosed the relationship to the company.

Nvidia's code of conduct lists "personal relationships" as one of the circumstances that may create conflicts of interest, and explicitly requires employees to proactively contact the legal department for guidance when facing potential or actual conflicts of interest.

Gil Soffer, former U.S. Department of Justice official and chairman of law firm Katten, said via email that if Huang had made a complete and truthful disclosure, it would benefit his current situation, as it would mean he did not conceal the relationship and the board had the opportunity to evaluate it and establish corresponding controls.

Soffer also noted that before more facts are made public, it is not yet possible to determine whether the relationship actually created a conflict of interest, whether the board's handling to date has been appropriate, and what level of discipline Huang should receive. He stated that if Huang concealed the relationship and engaged in misconduct, "removal may be an appropriate course of action."

According to Nvidia's latest proxy statement, Huang's total compensation over the past three years amounted to $120 million, primarily in the form of stock awards. The company's bylaws allow the board to remove him from his position by majority vote, "with or without cause."

Wall Street Reassesses "Key Person Risk"

Market analysts have expressed widespread concern about the potential leadership turmoil at Nvidia.

Haris Khurshid, Chief Investment Officer at Karobaar Capital, noted that this is no longer a single personal scandal but has evolved into a serious governance and key person risk, and investors are beginning to reprice sentiment across the entire AI sector.

Joe Gilbert, Portfolio Manager at Integrity Asset Management, explicitly stated that this is an "unquestionably negative development" for Nvidia and the entire AI ecosystem, as it is nearly impossible for a successor to replicate Huang's strategic vision.

Michael O'Rourke, Chief Market Strategist at Jonestrading, noted that Nvidia had previously forecast 70% sales growth this year, and under aggressive sales tactics and vendor financing models, a successor may need a full year to "put out fires and clean up the mess."

Matt Maley, Chief Market Strategist at Miller Tabak + Co, warned that as a major financier of the AI industry, Nvidia's leadership turmoil could lead the entire industry to cut spending. Brian Mulbe of Zacks Investment Management