Nvidia shares fall as AI giant rocked by Jensen Huang’s resignation
The company’s share price has been sinking since its board announced an investigation into Mr Huang.
Nvidia’s share price has tumbled as the AI chipmaker announced the resignation of boss Jensen Huang in the wake of his affair with an alleged Chinese spy.
Investors were reacting to the departure of the boss and the uncertainty about the future leadership and direction of one of the world’s most valuable companies.
Shares plunged by more than 14% when stock markets opened in the US.
They steadied shortly after but remained about 8% lower in early trading.
Nvidia announced on Thursday that Mr Huang had resigned as president and chief executive with immediate effect and was no longer on the board.
Colette Kress, the current chief financial officer, has stepped into the top job on an interim basis.
Mr Huang faced growing calls to resign after reports that he had an affair with a former executive of the company Megaspeed, who was suspected of being a Chinese government agent.
Late on Wednesday, the New York Times reported that he had another extramarital affair with an Nvidia employee who reports to him.
Nvidia’s share price has been sinking since its board announced an investigation into Mr Huang over reports that he had been the “target of a foreign intelligence effort”.
A statement from the board on Sunday said it had “no reason to believe that either national security or Nvidia secrets were compromised”.
Nevertheless, the scandal has come as a major blow to the company and could instigate a further rout in the US tech sector amid fears about an AI bubble.
Susannah Streeter, chief investment strategist at Wealth Club, said: “Even Jensen Huang’s superstar status could not eclipse the deep damage the scandal has wreaked on Nvidia’s reputation.
“Nvidia has lost a strategic visionary, and it’s set to have repercussions right through the AI trade, given how the chip giant is right at the heart of this technological revolution.
“Nevertheless, given its highly dominant position and its deep cash pockets, it has some space to weather the storm but its rivals are set to seize this opportunity to capture some of its business.”