“Jensen is Nvidia,” says analyst, as shareholders sue and the FBI reviews Huang’s affair
Nvidia lost roughly US$190bn of market value on Monday, with shares closing 4.27 percent lower while broader US indexes rose.
CNBC reported the 4.27 percent close. Reuters put the reduction in market capitalisation at approximately US$190bn, and Bloomberg at nearly US$200bn, against a company valued at US$4.5tn, according to CNN.
Shareholders led by Mark Kistenmacher sued Nvidia and chief executive Jensen Huang on Monday in a proposed class action in federal court in San Jose, California, Reuters reported, accusing them of defrauding investors by concealing Huang’s ties with a suspected Chinese spy.
The complaint was filed five minutes after the US market closed, according to the news site, and seeks unspecified damages.
Huang admitted an affair with Alice Huang, a Megaspeed executive whom US intelligence agencies allege spied for China, according to a previous report by Wealth Professional.
“I take full responsibility for what I did and the hurt I caused, and I accept the criticism that comes with it,” Huang said in a message to employees.
Nvidia’s financial filings do not identify Huang as a key person, CNBC reported, stating instead that “we are highly dependent on the services of our longstanding executive team.”
The filings warn that “failure to ensure effective succession planning, transfer of knowledge, and smooth transitions involving executives and key employees could hinder our strategic planning, execution, and long-term success.”
Huang holds roughly 3.6 percent of the world’s most valuable chipmaker, Reuters reported, citing LSEG data, and Nvidia has no dual-class share structure of the kind that gives Mark Zuckerberg control of Meta Platforms or Elon Musk control of SpaceX.
Internal records reviewed by CNBC show he had 33 direct reports this week, including chief financial officer Colette Kress and chief scientist Bill Dally.
“The issue at Nvidia is that there is no clear successor to Jensen, and we had expected him to stay in this role for at least 10 more years,” analysts at Melius Research wrote in a Monday note quoted by CNBC.
Stacy Rasgon, an analyst at Bernstein, told CNBC’s Squawk on the Street that “Jensen is Nvidia. Nvidia is Jensen.”
Yale professor Jeffrey Sonnenfeld told CNN he sees a 50/50 chance Huang keeps his job.
“There is no board succession plan, which is extraordinary. Jensen has bragged about having 60 direct reports. That’s crazy,” Sonnenfeld said.
Morningstar senior equity analyst Brian Colello told the news site that major buyers of Nvidia’s chips and software are unlikely to cut capital spending over uncertainty around the chief executive position, though “costs of capital may rise for future investments if perhaps the most prominent CEO in the AI landscape is no longer orchestrating such deals.”
US President Donald Trump said on Monday that the FBI was examining the matter. “I know the FBI is looking into it,” Trump told a White House briefing, per Reuters. “I think that he’ll be in good shape.”
Nvidia’s board, which opened an independent investigation into Huang on Sunday, November 8, said it has “confidence in Jensen,” as quoted by CNBC.
Bloomberg reported a committee of independent directors will work with outside counsel.
Congress is more likely to pass legislation tightening China’s access to AI chips following the reports, lawmakers and advocates told Reuters.
US House Democratic leader Hakeem Jeffries called for passage of an annual defence bill carrying restrictions on chip sales to China, Reuters reported.
