Nvidia prepares to oust Jensen Huang, WSJ reports — stock sinks

• The New York Times reported that Nvidia CEO Jensen Huang had an extramarital affair with an employee named Kimberly Powell.
• The report comes days after Huang admitted to an affair with a woman who is believed by U.S. intelligence of being a Chinese spy.
• Powell is vice president of health care at Nvidia, and joined the company in 2008.

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Follow your favorite stocksCREATE FREE ACCOUNTwatch nowVIDEO0:5700:57Nvidia preparing to oust CEO Jensen Huang, according to the Wall Street JournalFast Money

Shares of Nvidia fell more than 7% in after-hours trading on Wednesday after The Wall Street Journal reported that the company's board is preparing to oust CEO Jensen Huang.

The news landed minutes after The New York Times reported that Huang had an extramarital relationship with another executive at the company.

The alleged relationship was with Kimberly Powell, vice president of health care at Nvidia, according to the report. Powell's bio on the Nvidia website says she's "responsible for the company's worldwide healthcare business, including hardware and software platforms for accelerated computing, AI, and visualization that power the ecosystem of medical imaging, life sciences, drug discovery, and healthcare analytics."

Huang and Powell were reportedly captured on camera being affectionate with one another at a hotel in San Jose, California in March, according to the Times.

Nvidia did not immediately respond to CNBC's request for comment. Heller, the crisis PR firm Huang reportedly hired as early as last year, did not immediately respond to CNBC's request for comment.

The report comes days after Huang admitted to an affair with a woman who is believed by U.S. intelligence of being a Chinese spy. The CEO was romantically involved with Alice Huang, according to The Financial Times, who U.S. intelligence officials believe is a spy for China's Ministry of State Security, The New York Times reported.

Nvidia stock chart.

Nvidia's board of directors has opened an independent investigation and hired the law firm Wachtell, Lipton, Rosen & Katz to look into the spying allegations.

"I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did," Huang wrote in the message to Nvidia staff on Sunday. "I am deeply sorry."

Most of Huang's Nvidia shares are co-owned with his wife, Lori Huang, and are held in trusts. About 800 million shares are held by those trusts. Huang holds about 70 million shares on his own and has limited economic control over the company.

Nvidia's VP of healthcare, Kimberly Powell, is interviewed by CNBC, Feb. 9, 2023 in Santa Clara, California at Nvidia's headquarters.Andrew Evers | CNBC

Rumors of an affair between Huang and Powell have circulated for years, in part because Powell lacks a background in health or science, according to a former employee who asked not to be named because of the sensitivity of the matter.

Healthcare is a smaller business at Nvidia. The company makes chips for medical devices and MRI machines, but they are a minor in comparison to the revenue generated from its advanced AI systems and graphics processing units, or GPUs. In recent appearances, including at the company's annual GTC conference, Powell has spoken about how Nvidia's AI technology can help accelerate drug discovery, assist providers and improve clinical efficiency. Powell has been leading the group since 2017.

Nvidia's stock is down 7% this week and is on pace for its sixth straight weekly slide, reflecting broad concern on the sustainability of the artificial intelligence buildout. The AI infrastructure trade was hit particularly hard last week after the midterm elections, as Democrats won sweeping majorities in both houses of Congress, and dozens of ballot measures past that could make building data centers more difficult.

Huang has become synonymous with the AI industry, and he is often referred to by his first name ,"Jensen," by customers and rivals. Nvidia has been one of the primary beneficiaries of the AI boom since its chips are used to train models and run large AI workloads.

—CNBC's Lora Kolodny and Kif Leswing contributed to this report

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WATCH: Jensen Huang said to have had relationship with Nvidia executive who reports to him: New York Times

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