Jensen Huang’s recklessness leaves Nvidia with no good options

Detailed summary

His affair will bring lasting damage to the company | World News

Few companies have looked as unassailable as Nvidia in recent years. Its whizzy chips, together with its software and networking gear, made it indispensable to the artificial-intelligence boom, affording it an outsize share of the profits from the technology. Now Jensen Huang, who co-founded the company and has led it for over three decades, has weakened Nvidia to a degree that no rival could have hoped to achieve. On November 12th, as The Economist went to press, its board was reportedly preparing to oust him.

Mr Huang’s unravelling has been swift. In a short memo on November 8th he confessed to an extramarital affair, apologising to his family and his company. At the same time Nvidia’s board announced it had launched an investigation into whether he had “been the target of a foreign-intelligence effort”. The admission followed reports that he had been romantically involved with Alice Huang (no relation), a Chinese executive at Megaspeed, a Singaporean data-centre company that buys Nvidia’s chips. American officials suspect Megaspeed of smuggling banned chips into China—and believe Ms Huang to be a Chinese agent (a claim rejected by the Chinese government).

Then on November 11th The New York Times reported that Mr Huang also had an affair with an executive who reported directly to him. Nvidia’s share price, which had been down by 7% since Mr Huang’s memo, plunged by a further 9% in after-hours trading after reports his job was in jeopardy. Colette Kress, Nvidia’s finance chief, is widely tipped to step in as interim boss if he goes.

Two questions now loom large. Can Nvidia, until recently the world’s most valuable company, thrive without Mr Huang? And can the AI build-out, which the company has done so much to bankroll, survive the shock?

It may be the affair with a subordinate that seals Mr Huang’s fate, but it was his entanglement with the Megaspeed executive that raises the most troubling questions.

Megaspeed, a “neocloud” that rents out access to AI processors, is…

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