Credit, Reuters
American technology giant Nvidia is evaluating this Thursday (11/12) whether its chief executive, Jensen Huang, will remain at the company, according to press reports.
The company announced last Sunday (8/11) that it had opened an independent investigation to investigate his alleged relationship with a woman suspected of being a Chinese spy.
More recently, however, the company's board of directors met as its shares plunged following reports of a second alleged extramarital affair involving Huang.
The New York Times alleges that Huang also had an affair with an Nvidia employee.
The Economist argued, in an article published on Wednesday (11/11), that the executive president should resign from his position or be fired.
"Even if no further compromising revelations come to light, Huang's continued tenure in office is untenable. He must resign or be fired," the text reads.
Nvidia's board had shown support for Huang, saying it had no reason to believe that company secrets or national security had been compromised as a result of the first extramarital affair.
As of late Wednesday night, Nvidia's board had not released any statement. Calls to several company representatives and board members were not returned.
End of Most read
Shares plunged 7.5%
Watch news from Brazil and the world on the BBC World Service
Download here
End of app promotion
Shares of Nvidia, the second most valuable company in the world behind Apple, plunged almost 7.5% in trading after the market closed.
The giant chip manufacturer ended the day on a high on Wall Street, after difficult days since the extramarital affair was revealed.
Large investment firms also downgraded their recommendations for the company's shares amid growing concerns about the company's governance.
Financial firms Baird and Bernstein Research downgraded their outlook for Nvidia shares, while Morgan Stanley removed the stock from its list of favorite investments.
Bernstein lead analyst Stacy Rasgon cut his price target on the stock in half. "Our intuition tells us that we probably haven't yet fully explored everything that can be discovered here," he wrote.
Since the scandal came to light, Nvidia has lost nearly half a trillion dollars in market value.
The American technology giant is valued at around US$4.5 trillion (R$25.1 trillion) and is one of the main suppliers of advanced chips.
It is considered one of the most important companies behind the expansion of artificial intelligence (AI), as it is the only manufacturer of a chip used in AI tools.
These chips are also essential for all sorts of technology, from video games and autonomous vehicles to massive data centers and cloud servers.
China is the United States' biggest competitor in the race to develop the most powerful AI systems, and Washington has restricted exports of Nvidia's most advanced chips to the Asian country since 2022.
The United States justifies restrictions on exports on national security grounds, arguing that these sales could expand China's military capacity, although some restrictions have been relaxed under President Trump's administration.
'Shakespearean tragedy'
Jensen Huang's possible departure from Nvidia is unfolding like a Greek or Shakespearean tragedy, Bob O'Donnell, chief analyst at Technalysis Research, tells BBC News.
An eventual departure would raise questions about who would take over and how that person would change the company in the coming years, says O'Donnell.
"It's hard to believe," he says. "[Huang] is an extraordinary figure... a great visionary."
Nvidia faces "a serious governance crisis" and will need to decide whether the benefits of Huang's stay outweigh mistrust among stakeholders, adds R Ray Wang of Constellation Research.
According to him, the scandal represents a crisis more for Nvidia than for the AI sector.
The company needs to assess whether a possible replacement for Huang would have the same ability to establish partnerships of the same size, he says.
"That's the real question... because a lot of these partnerships and investments were made because of the trust in Jensen."
US must 'stop inventing' espionage accusations, says China
At a daily Chinese Foreign Ministry news conference in Beijing, spokeswoman Mao Ning told BBC News that the United States "must stop inventing alleged espionage narratives to find pretexts to impose technological blockades."
"China's scientific and technological progress is driven by independent innovation and open cooperation," he said.
"China and the United States have maintained close communication on interactions between the two heads of state. China is willing to work with the United States to fully implement the important understandings reached between the two heads of state and promote the building of a constructive and strategically stable Sino-US relationship based on respect, equity and reciprocity," he said.
Discover more
Watch
End of Watch
