Shares of Nvidia plunged after the AI chipmaker announced that Jensen Huang has resigned as president, chief executive and board member with immediate effect. Shares fell more than 14% when US markets opened and steadied shortly after, though they remained about 8% lower in early trading. Colette Kress, the company's chief financial officer, has stepped into the top job on an interim basis while the board searches for a permanent replacement, weighing both internal and external candidates.

Huang's exit follows mounting scrutiny over two extramarital affairs. Reports said one involved a former executive of the company Megaspeed who was suspected of being a Chinese government agent, and another involved a senior executive who reports to him. The departure came days after Nvidia's board launched an independent investigation into reports that Huang had been the target of a foreign intelligence effort, and a board statement on Sunday said it had no reason to believe national security or Nvidia secrets were compromised.S1S2

Kress, who has served as CFO since September 2013 and has nearly 25 years of finance experience at companies including Cisco and Microsoft, said in a statement that she was committed to building on the foundation Huang created over 33 years. The board thanked Huang for his immeasurable contributions, expressed full confidence in Kress and the leadership team, and said operations, customer commitments and the product roadmap would continue without interruption. Board chair Harvey Jones praised Kress's deep understanding of the business.S1

Before the announcement, Nvidia stock traded at $164.80 with a market capitalisation of $3.88 trillion, and it was down 15% year to date and 27% over the past six months. Analysts warned the scandal has damaged the company's reputation at a time when the sector faces fears about an AI bubble. Keith Fitz-Gerald of Fitz-Gerald Group said Nvidia faces challenges of vision and shattered trust, noting that no one inside the company has been groomed to fill Huang's role as chief strategist, salesman and evangelist. Susannah Streeter of Wealth Club said the company has lost a strategic visionary and that rivals may seize the opportunity to capture some of its business, though its dominant position and deep cash reserves give it room to weather the storm.S1S2