The closing bell rang on Wednesday, 11 November, and the trouble started after it, once ordinary trading had stopped. Word got out that the board of directors of Nvidia was meeting to decide what to do about the man who co-founded the company and has run it since 1993. Within hours the market had answered. As Al Jazeera reported, Nvidia shares fell 8.6 percent in after-hours trading as questions spread about Jensen Huang’s place at the top of a company valued at $4.2 trillion.
A meeting nobody confirmed
The Wall Street Journal broke the news of the meeting first, citing people familiar with the matter, according to NBC’s account of the evening. NBC News said it had not confirmed that the board was meeting that night. One person who spoke to NBC News said the directors were dealing with Huang’s future, and then admitted the limits of what anyone outside the room knew: “I don’t know what the board is going to do.” CNN’s live coverage carried the same story of a board discussing its chief executive while the stock fell.
Nvidia did not answer repeated requests for comment on Wednesday.
This company sells the machines the world now uses to predict things. That evening it could not predict its own next day.
Four days in November
It took four days to get from confidence to crisis. On Sunday, 8 November, the board opened an investigation into reports that Huang had been targeted by Chinese intelligence. That same Sunday Huang wrote to employees that he had been “unfaithful to his wife,” and said nothing more. NBC News reported that US intelligence agencies had concluded that a woman, Alice Huang, was a Chinese operative. Beijing dismissed the claims as “purely unsubstantiated and directed at smearing China.”
Then came a second story. The New York Times, citing five people who had worked at Nvidia, reported that Huang had also had a relationship with a woman who reported to him. NBC News said it had not confirmed that report. By then the board had already brought in a former US attorney and an elite law firm to look into its own chief executive.
For a powerful man, a private life is a liability that waits. Nothing happens for years. Then everything happens in one week.
The tremor spreads
NBC put the after-hours fall at almost 9 percent and calculated that if the drop held into Thursday’s open, it would wipe out more than $350 billion in value. Nvidia did not fall alone. Intel, Qualcomm and Arm Holdings also slid after hours, and at 9:40 p.m. Eastern time Nasdaq futures were down as well. The question of one man’s conduct and one board’s nerve was moving prices across the whole chip industry.
The figures are worth stating plainly. The value that might vanish at the opening bell was larger than many national economies, and it rested on a decision a few directors were making in a meeting the company would not even acknowledge.
The founder and the throne
The difficulty is not just about scandal. It is about who comes next. Huang has led the company for more than three decades, and he has no obvious heir. The analyst Stacy Rasgon summed up the dilemma in three words: “he IS NVIDIA.” He then took the argument into geopolitics: “The primary beneficiary of Jensen’s removal as NVIDIA’s CEO would clearly be China.”
Others see it differently. Jeffrey Sonnenfeld of Yale said the board should remove Huang.
This is an old problem, older than the corporation. A ruler who becomes the institution leaves the institution with nothing of its own to stand on. Investors had rewarded that fusion for years. On Wednesday night they were selling because of it. The founder whose genius was the company’s chief asset had, in his directors’ hands, become its chief exposure.
When the reports came out, the board had announced nothing: no vote, no resignation, no statement. A meeting is not a verdict. But in the after-hours market, where prices move on rumour, a reported meeting was enough to wipe out a large share of the company’s value.