Nvidia shares fall more than 7% amid reports of possible resignation of Jensen Huang

Plunge following report on the CEO's fate

Nvidia shares on Thursday fell 7.18%, or $12.48, to $161.25 in premarket trading compared with the previous closing price of $173.73, Anadolu reports citing a publication by The Wall Street Journal. According to the WSJ, the board of directors of the American chipmaker is preparing to meet to determine the future of co-founder and CEO Jensen Huang following reports of two extramarital affairs — including with a company employee and with a woman whom US intelligence officials suspect of working for China. However, the outlet did not establish that a decision on his removal has already been made.

The investigation and the board's position

As Anadolu notes, Nvidia's board of directors announced on Sunday the launch of an independent investigation after reports that Huang had become the target of a foreign intelligence operation. At the time, the board stated it had no reason to believe that US national security or the company's trade secrets had been compromised, and expressed confidence in Huang and his team, adding that he supports the review and has committed to cooperating. On Tuesday, the board's independent members said they had retained former acting US Attorney Jun H. Kim and the law firm Wachtell, Lipton, Rosen & Katz for the investigation.

Context for investors

The current decline renewed pressure on Nvidia shares after Wednesday's pullback: investors are weighing the uncertainty surrounding the leadership of one of the key suppliers of chips for artificial intelligence. It remains unknown when the board of directors might make a decision and what its outcome will be — according to the WSJ, the question of Huang's future is only being prepared for discussion.