Affairs are commonplace. Most likely the internal findings from the investigation point to something more troubling/illegal

Could be that breaking embargo and sleeping with spies had something to do with it. Wild guess, I know.

Plus Jensen Huang is an immigrant from Taiwan. And this administration does not like people who haven't been born on this geographical soil (being not born on US soil, I am obviously not against it, just pointing out obvious animosity of current US administration towards immigrants in general)

Trump likes successful ones:

Musk, Vivek, etc.

you mean financially successful right? Otherwise both are terrible parasites and recently we just seeing tip of an iceberg when it comes to Vivek (I know 2 people that worked for him, but I will leave it at that).

The absolute obliviousness of computer technicians to how business or politics work.

I don't know why you're getting downvotes. The parent comment, "Most likely the internal findings from the investigation point to something more troubling/illegal", is comical. The information on the public record already points to something troubling/illegal, as you just pointed out!

Like selling hardware to potential competitors of US AI inference services? The extent of the compute laundering has been pretty well covered.

I have a feeling we'll know the reasons for certain when Nvidia's stance on open models and local AI does an about-face.

A CEO admitting to an affair with a customer after previously denying it, seems like a sufficient reason for removal, even before you add the geopolitical intrigue.

I don't follow this logic. Why is an affair with a customer grounds for announcing a resignation that caused an instant 10% stock price drop?

Because the customer in question raises questions of the CEO's judgement, plus the possibility of knowledge that the target was violating sanctions. We don't know. That's why it's a bad situation for the stock.

The stock seems to be responding more heavily to the potential loss of Jensen than it does to the potential continuation of Jensen given new knowledge.

It also seems like there’s a high potential for half of Jensen’s position to be granted in a subsequent divorce decree, meaning there could be enormous selling pressure in the next several years.

Doesn't he only own like 3% of the stock? His wife would get 1.5% of the company and I see no reason for her to liquidate all of it right away.

[delayed]

He didn’t come clean on his own accord - he was faced with irrefutable evidence and admitted it.

How can you trust anything he says after this?

Why should regulators or other customers believe any promises made by him?

His credibility is shot - the day to day stock prices changes are irrelevant.

Morality is not a straight line, once someone has cheated they sort of accepted it for themselves after feeling guilty but that doesn't transfer to other places where someones morals are challenged.

He’s a dork with 100’s of billions, testing the rules. A bit like a teenager given infinite resources.

Imo that’s danger zone shit for the company, whether you’re offended by the morality bits or not.

You mean the short trader who wrote a report and pushed it is the good guy?

Maybe he will donate his proceeds to charity...

Yes. We should keep all bad things hidden. In the name of shareholder value.

He's baggin baddies, and blowing up stock prices. I honestly don't see the problem. Bought more NVDA, this dip is just free money.

You should never trust any CEO in first place, don’t know why everyone is trying to treat this guy as a school teacher.

Relationships and stock price are built on trust. An affair, a relationship with a customer/subordinate, and an attempted cover-up are all breaches of that trust.

> Why is an affair with a customer grounds for announcing a resignation that caused an instant 10% stock price drop?

OP said

>A CEO admitting to an affair with a customer *after previously denying it*, seems like a sufficient reason for removal

It's not the crime. It's the cover up.

In this case Jensen either 1) lied to the board about the affair, 2) directed the Nvidia PR to publish a materially false statement about it, or 3) both.

From a company governance standpoint it's incredibly hard to trust Jensen when he's either lying to you, using the company to protect his personal life, or (again) both.

Admitting to the affair with a customer is a nothingburger. Directing the company to release a false statement about it, and that customer turns out to be a Chinese asset if a BIG fucking deal.

Lying about it served no one's interest but Jensen's, and ended up hurting the company significantly.

Because it potentially gives the affair partner a lever to bypass internal company controls.

I'd go as far as to say the second leak helps him a bit, by reframing this as a cheating scandal rather than it being more about him knowingly evading an embargo.

Having an affair with your direct report also wildly increases the risk that Nvidia would be embroiled in high-profile lawsuits, either for sexual harassment or favoritism

Yea also multiple affair partners just increases the risk one of them will blackmail, which can 100% have effects on the bottom line.

Which is still better than prosecution for evading sanctions on China by working with a Chinese spy.

>increases the risk that Nvidia would be embroiled in high-profile lawsuits, either for sexual harassment or favoritism

Firing him doesn’t make them any leas liable for any potential sexual harassment or favoritism that already happened

Whether the board knowingly allowed the problem to continue can absolutely factor into the company’s liability.

I suspect that there gotta be something else going on with that as well. Maybe someone in the company wanna take his position or something.

Two back to back including one with a subordinate and one involving a person violating export controls though are pretty tough to weather. And I doubt that's the end of the affairs too, I'm not a Huang is months away from having dated every woman on earth extrapolationist but I also doubt he's only had (or has) 2.

Nvidia's previous denials are a significant issue from a board of directors position. He either lied to the board about it, directed the company's PR people to make a false statement about it, or both. And that lie turned out to be material (in a SEC sense of the word material).

It would be very difficult for the board to regain trust in his ability to make choices that are correct for Nvidia, rather than himself.

The board probably determined it would impact the stock too negatively to keep him on.

I also think the info the board used to make that determination is not yet public

That certainly won't be the conclusion of the board as less surprising firing Jensen - stock-wise the best-performing CEO of this decade so far - affects the stock way more negatively than sex affairs even with spies made public. So there is more to it than the public will be let known.

Wouldn't this open him up to blackmail and espionage? The people he cheated with whether they exploited it or not had kompromat on him. Not only that but the new allegations show he has a pattern of acting a way that would let people get kompromat on him, not just a 1-time thing. So even though the cat's already out of the bag now, who knows if any demands were made or proprietary info leaked.

If the Huang has a secret relationship with a report then he's in a lot of trouble and the company is in some trouble. If the companies response to that relationship is to do nothing - now the company and Huang are both in a lot of trouble. Heck the problem with the first affair isn't the is she or is she not a spy - if Huang could convincingly argue that he didn't know then he's a victim - the problem is having a relationship with a customer, that's actually not much better then with a report.

Define “a lot of trouble”.

>> he made Nvidia (and investors) so much money.

Right now, he made them lose 700 Billion dollars. So the investors lawsuit also will be the biggest in history.

Did he do that, or did the board’s actions do that?

After the news about a potential foreign compromise, disclosure of an affair with a subordinate is pretty damning. One can be discounted as poor judgement. Two is a pattern that's hard to dismiss. I wonder if we'll learn of other shenanigans or whether kicking him out stops future (possible) disclosures.

Poor judgment? He was larger than life persona, many times compared to Musk (minus huge Twitter follower) who is also very well known for his extramarital affairs.

I mean, cheating is not nice and not morally great, but who cares for a CEO. He isn't hired for being a good husband.

The spy thing is juicy, maybe it's surface level, maybe it's deeper.

Its like saying: I mean, molesting children is not nice and not morally great, but who cares for a priest? He isn't hired for being a good person, he is hired to conduct worship services during Sunday mass.

Not the same thing at all.

If we fired people for infidelity the entire stock market and greater economy would tank and most of congress would be empty seats.

ok bunch of people doing bunch of horrible things. But what's your point?

My point is that we don't care about infidelity, at least not enough to fire them.

[delayed]

> C-level execs get fired for it all of the time

No they don't. They get fired for undisclosed workplace conflicts of interest and fiduciary liability, not infidelity.

No, not even remotely the same thing. Lack of consent aside, no one would ever say that about a priest.

I didn't know Huang's wife consent to his extramarital affair.

No it's not like that at all.

An adult woman being wronged by infidelity is not remotely like a child being molested. Wth is wrong with you?

No one cares about the sex life of a ceo of a company that big except their own direct family. Investors don't care, customers don't care, vendors don't care, the government doesn't care, and that's the entire list of people that matter. His wife and other immediate family care and that's it.

The only reason anyone (of any relevance or significance) cares in this case is becsuse of the embargo & national security angle.

I'm not sure why you think a person's lack of honesty and integrity in their personal life is unrelated to how trustworthy they are in business.

If they are willing to betray their own spouse then they are absolutely capable of deceiving and betraying their employees and shareholders.

This separation you seem to see between business and personal life doesn't actually exist. That's an unrealistic fantasy.

We may conceal parts of ourselves at work for politics and professionalism but you are the same person inside of work and out.

I think internally they know that the violation of export controls is gonna be sticky and it’s almost zero percent about an affair

I think they go spooked because he's been a proponent of relaxing export controls to China and it turns out it's because his mistress/gf is a chinese spy who is influencing him. And NVIDIA is making what currently is probably a product of national security importance.

If I was them, I'd be worried that the government invoke the Defense Production Act (DPA) or impose National Security Agreements and Clearances which would require NVIDIA to isolate sensitive R/D, restrict foreign nationals from accessing specific chip designs, and place government-vetted compliance monitors on its board or security teams. ALSO there definately will be subpeonos and probes and those are never fun.

Easier to say we cut out the guy responsible and hopefully that lessons the troubles

This is what I keep coming back to. The board is not some random board. They know Jensen is their golden goose, there is no NVIDIA without Jensen. What they saw must have been company-existentially-illegal for them to throw their golden goose under the bus as a survival tactic.

edit: btw the board has a director that’s ex-Cooley, no greenhorn I imagine to congressional investigational scrutiny. It had to be something that made them realize cutting ties with Jensen immediately was the only way to survive.

the second one being with an employee, and a direct subordinate at that, is inexcusable to the board