Nvidia boss Jensen Huang could be ousted from the chip giant he founded over three decades ago after reports emerged of a second extramarital affair, threatening to bring an end to one of the tech sector’s most influential careers and sending a chill through global markets.

The firm’s board is reportedly preparing to remove its chief executive following the news of a relationship with an employee who reported directly to him, adding to a scandal involving a separate affair with a suspected spy.

Nvidia’s directors met on Wednesday to determine Huang’s future, although no official decision has yet been announced.

The New York Times reported that Huang had an extramarital relationship with Kimberly Powell, Nvidia’s vice president of healthcare, citing five people who worked at the company.

The allegations follow reports that Huang had been involved with Alice Huang, an executive at Singapore-based data centre firm Megaspeed whom US intelligence officials believe has links to Chinese intelligence. China has denied the allegations.

The escalating crisis has sent waves through global markets, wiping an estimated $671bn (£510bn) from Nvidia’s market value since Sunday, according to AJ Bell.

Nvidia shares fell nearly six per cent in pre-market trading on Thursday, while Nasdaq futures slipped 0.9 per cent as investors weighed the prospect of the AI industry’s most recognisable figure being forced out.

Nvidia’s leadership crisis rattles AI trade

Huang, who co-founded Nvidia in 1993, has been its only chief executive, overseeing its transformation from a graphics chipmaker into the company at the centre of the global AI boom.

His potential departure has raised questions about the future of the AI investment trade, with Nvidia accounting for approximately eight per cent of the Nasdaq and seven per cent of the S&P 500.

“No one had Jensen Huang leaving Nvidia on their bingo card for this year”, said Kathleen Brooks, research director at XTB.

She warned that the lack of a publicly identified successor was exacerbating the sell-off, with investors struggling to determine what Nvidia would be worth without its founder.

“Corporate governance issues are hard to price, and they are hard for companies to sort out without mass executive exits”, she added.

Nasdaq 100 contracts fell 0.8 per cent after rising about 2.3 per cent yesterday. Tech stocks also fell across global markets, with South Korea’s Kospi index sliding around 0.6 per cent and Taiwan’s Taiex 2.6 per cent.

While Nvidia’s shares have been battered, some of its biggest competitors have emerged as potential beneficiaries.

AMD shares climbed nearly four per cent, while Broadcom and Alphabet also gained as investors weighed whether further US restrictions on Nvidia’s chip exports to China could benefit rival suppliers.

Brooks said the scandal could also threaten Nvidia’s role as a major financial backer of the wider AI industry.

“Nvidia has acted like an unofficial and unregulated central bank to the AI industry,” she said.

She warned that Huang’s departure could disrupt the financing arrangements underpinning parts of the sector’s expansion, including Nvidia’s investments in smaller AI infrastructure companies.

Meanwhile, European stock markets have outperformed their technology-heavy US counterparts this week, with investors increasingly looking beyond the handful of American technology giants that have dominated global equity returns.

The FTSE 100 opened on firmer footing on Thursday, helped by its relatively limited exposure to the AI sector.

Who could replace Huang?

Huang owns approximately 3.6 per cent of Nvidia and has no publicly identified successor.

The board has been working with an external firm to identify potential replacements, while also considering appointing an interim chief executive.

Colette Kress, Nvidia’s long-serving chief financial officer, has emerged as a possible temporary replacement, while Ian Buck, a senior executive responsible for key parts of the company’s computing technology, has been mentioned as a potential internal candidate.

“She has been CFO for 13 years and fronts every earnings call alongside him, so she’s a familiar and trusted voice for the market at a time when it badly needs one”, he said.

But he warned that finding a permanent successor would be considerably harder.

“Huang has been the brains behind the product and the chief salesman rolled into one, and finding both in one person is going to be a huge challenge.”

The leadership crisis lands just days before Nvidia is due to report its third-quarter results on 17 November.

Wall Street expects revenue to jump nearly 91 per cent to approximately $108.8bn, with adjusted earnings per share forecast to almost double to $2.47.

Gilbert said Nvidia was heading into earnings with investors “talking about everything except chips”.

“Jensen has long been the voice that sells the AI story to the market each quarter, so a cloud over him is a cloud over the stock, and that cloud has turned into a storm,” he said.