A rapid succession of personal revelations and national security concerns surrounding Nvidia co-founder Jensen Huang triggered a historic stock selloff this week, wiping out approximately $490 billion to $500 billion in market capitalization and culminating in Huang's abrupt resignation. What began over the weekend as an internal inquiry into an illicit relationship escalated within four trading days into the departure of the 63-year-old executive who led the chipmaker for 33 years.
The crisis ignited when Huang admitted in a letter to employees that he had been unfaithful to his wife, confirming an extramarital relationship with Alice Huang, a former executive at Singapore-based data center operator Megaspeed International who had no relation to him. Media reports noted that US intelligence officials had circulated a memo earlier in the spring flagging suspicions that Alice Huang was recruited by China's Ministry of State Security to gather intelligence and bypass US chip export restrictions. In response, Nvidia's board launched an independent investigation to determine whether national security or proprietary secrets were compromised.
Investors reacted swiftly when markets opened, driving Nvidia shares down by 4.3 per cent on Monday and another 5.5 per cent on Tuesday. The combined 9.6 per cent two-day slide erased more than $430 billion in market value. Forbes reported that Huang's personal fortune immediately took a significant hit as shares slid, while President Donald Trump confirmed that the FBI was examining the situation. Concurrently, a shareholder filed a proposed class-action lawsuit in California alleging that Nvidia had misled investors regarding national security risks, and Microsoft temporarily overtook Nvidia as the world's second-most valuable company.
Nvidia shares experienced a brief relief rally on Wednesday supported by strong earnings from artificial intelligence cloud partner CoreWeave. However, sentiment reversed sharply after the closing bell following reports from The New York Times that Huang had engaged in a second extramarital relationship with a direct subordinate, Nvidia's vice president of healthcare, Kimberly Powell. Simultaneously, The Wall Street Journal reported that the board of directors was preparing to oust Huang, causing the stock to tumble nearly eight per cent in after-hours trading.
Ahead of Thursday's opening bell, Nvidia officially announced that Huang had stepped down as president, CEO, and board member with immediate effect. The company named longtime Chief Financial Officer Colette Kress as interim CEO and board member Harvey Jones as its first-ever independent chairman. At the market open, Nvidia shares plunged as much as 14.3 per cent to an intraday low, temporarily pushing the company's valuation below $4 trillion.
Although the stock pared some losses by the closing bell to finish down 4.3 per cent, the cumulative wipeout reached approximately $490 billion from the previous week's close. Following the stock decline, Huang's net worth fell to approximately $144.7 billion, moving him to the 13th spot on Forbes' billionaire list and making him the day's biggest loser in terms of daily net worth changes.