Commentary: Everything Jensen Huang said about China is out the window

Nvidia's board of directors confronts a $1 trillion dilemma as they weigh whether to part ways with co-founder and CEO Jensen Huang, who is currently embroiled in multiple investigations over his alleged affair with a Chinese executive. Huang, a central figure in Nvidia's success for over three decades, is facing serious challenges, including an independent inquiry by the board, a shareholder lawsuit, and questions from lawmakers.

The allegations of a close relationship with a former female executive at an Nvidia customer, suspected of working with China's intelligence agency, have further spooked shareholders, causing the company's shares to drop by 10% in the past two trading days, or approximately $450 billion. This incident highlights the company's heavy reliance on one individual, with Columbia Business School professor Shiva Rajgopal comparing the situation to the impact of losing Elon Musk on Tesla and SpaceX's valuations.

Analyst Dan Ives estimates that Nvidia could lose up to 30% of its valuation if Huang is removed from his role, while current expectations suggest he will retain his position. Corporate governance experts caution that Huang's alleged relationship with a Chinese executive violates Nvidia's code of conduct, which emphasizes high ethical standards and the potential conflict of interest.

Despite Huang admitting to his infidelity and apologizing for his actions, the consequences for Nvidia remain unclear, as the board grapples with the lack of suitable successors and the potential for a major negative impact on the tech industry and AI revolution.