Can Nvidia CEO Jensen Huang survive this crisis?

Nvidia shares plummeted by around 5% on Monday following CEO Jensen Huang's admission of an extramarital affair, coupled with the company's investigation into claims he was targeted by a foreign intelligence effort. The crisis has left Huang facing significant pressure, as the company probes reports that Alice Huang, the woman involved, may be a spy for China.

Yale School of Management's Jeffrey Sonnenfeld, who specializes in leadership studies, suggests Jensen Huang's best chance of surviving the scandal lies in his "idiosyncrasy credits" – goodwill accumulated over his three-decade-long tenure at Nvidia. Despite this, Sonnenfeld concedes Huang's career is salvageable, with a 50-50 chance of retaining his position, but it hinges on the findings of the company's investigation.

Huang's long track record of leadership and success could work in his favor, as others have rebuilt their careers after scandals. However, his unique situation poses challenges. As the founder and CEO of Nvidia, he lacks a fallback position at another company, and replacing him would prove difficult due to his flat management structure and the absence of a dual-class share structure that would provide him with greater control over the company.

The outcome of the crisis may also depend on the timing, as Nvidia is set to announce earnings on November 17 and Huang is expected to provide a closed-door briefing to US lawmakers on November 18.