Nvidia Shares Fall 8% After Hours on Reports of Second Huang Affair Allegation and a Board Move to Remove Him

Since Nvidia's board launched its probe of Jensen Huang on Nov. 8, the company's market value has fallen by more than $450 billion. Today, Nov. 11, after the 4 p.m. ET close, two new reports pushed the stock down again.

Nvidia shares fell more than 8% to $159.51 in after-hours trading, according to CBS News. That wipes out the 2.9% rebound to $173.73 in the regular session.

A second alleged affair

The New York Times reported that Huang, 63, also had an extramarital relationship with Kimberly Powell, 48, Nvidia's vice president of health care, who reports to him. The paper cited five people who worked at the company. Both Huang and Powell are married to other people.

Two of the sources told the Times the pair were seen being affectionate at a San Jose hotel in March, during Nvidia's GTC developer conference, while company executives met nearby. Three people briefed on the incident said a bystander filmed it, and that Huang's security team sequestered the bystander and offered a nondisclosure agreement.

The Times said it has not seen the video. These are anonymous allegations. Neither Huang nor Powell has confirmed them.

When the Times reached Huang by phone and asked about Powell, he said, "I don't think you should be talking to me directly," and hung up. Nvidia declined to comment. Powell did not immediately respond.

Nvidia's code of conduct tells employees to avoid situations that "create conflict" and lists "personal relationships" among them. It also says the company "promptly investigates reports of misconduct."

Board reportedly preparing to act

The Wall Street Journal, citing people familiar with the matter, reported that the board is preparing to remove Huang, who co-founded Nvidia in 1993. The board could meet as soon as today, the paper said. No final decision or official announcement has been confirmed.

That would be a sharp reversal. Days ago the board hired Joon H. Kim, a Wachtell, Lipton, Rosen & Katz partner and former federal prosecutor, to lead its investigation. Nvidia's board had earlier said it had no reason to believe company secrets or national security had been compromised.

Huang admitted the affair with Alice Huang (no relation) in a Sunday email to employees. "There is no excuse for what I did. I am deeply sorry," he wrote. He said he is cooperating with the board's inquiry. U.S. intelligence officials have concluded Alice Huang spied for China, according to the New York Times. China has denied the espionage allegations. Megaspeed, the Singapore cloud company where she worked, has denied skirting export laws.

Market and political fallout

The damage spread beyond Nvidia after hours. CoreWeave fell more than 4%, Supermicro nearly 5%, Micron nearly 3% and TSMC more than 2%, according to Business Insider.

Adam Crisafulli of Vital Knowledge said in a note that the news is "obviously negative," calling Huang "the most prominent executive at the most prominent company sitting at the center of the world's most important industry." Wall Street analysts cited by CBS say Nvidia lacks an obvious successor. Dec Mullarkey of SLC Management said markets will want more on governance changes when the company reports results.

On Polymarket, odds that Huang announces a resignation or removal by year-end rose to roughly 31% from about 16% earlier Wednesday, per Crypto Briefing. That was measured before the Journal report.

In Washington, Sen. Kevin Cramer, R-N.D., repeated his call for Huang to resign. "This is a guy that's right now so vulnerable to extortion, blackmail," he told CNBC. Rep. Suhas Subramanyam, D-Va., also said Huang should resign.

Reps. Brian Mast and John Moolenaar told reporters they had not heard from Huang and set an end-of-day deadline to respond to their request for a closed-door briefing. Asked about a subpoena, Mast said "yes," the committees are considering one. Moolenaar said all three committees have subpoena power. Their Nov. 4 letter had requested testimony on Nov. 18.

President Trump has taken a different line. He said this week that Huang told him he had "absolutely no idea that the person in question was a spy," and added, "I think he'll be in good shape." On when he first learned of concerns about Alice Huang, Trump said, "Certainly it didn't make much of an impact on me."

The Justice Department's National Security Division is investigating whether Megaspeed violated export control laws, in an inquiry that includes scrutiny of Alice Huang, according to a person familiar with the matter cited by the AP. No charges have been filed against Jensen Huang, and no one has publicly alleged he knew she was a spy.

Nvidia reports quarterly results Nov. 17, six days from now. Whether the board acts before then, and whether Huang answers the House committees' request, are both unresolved as of tonight. Nvidia has not commented on the Journal report.