View: Nvidia’s $4.5 trillion test of founder immunity

Without dual-class shares to protect him, Jensen Huang faces a board investigation, congressional questioning, and a market struggling to imagine life without him. There’s little precedent in US corporate history for the crisis facing Nvidia after reports that Jensen Huang was targeted by a Chinese “honeytrap” operation. The national security implications of the allegation, the chipmaker’s founder-CEO’s centrality to his company’s growth story, and Nvidia’s pivotal place in the AI ecosystem all mean the fallout is likely to stretch further than other cases of executive infidelity.

Nvidia’s board on Sunday announced an independent investigation, but expressed confidence in Huang. In his own statement admitting that he had been unfaithful to his wife, Huang said he remained “fully committed” to the company. Nvidia is, at the time of writing, the world’s second-most valuable company after Apple, with a market capitalization of $4.5 trillion — almost 12% of the Nasdaq 100 index.

And no public company has been more important to the AI revolution or its impact on stock markets: The ravenous appetite from hyperscalers such as Amazon and Google for Nvidia’s chips propelled its annual revenue from under $11 billion to more than $130 billion between 2020 and 2025. The most bullish analysts think its sales will hit $1 trillion in 2029. Huang’s personal indiscretions do not change Nvidia’s order book.

But he has been inseparable from its commercial success story, helming its new product presentations, negotiating the loans to customers that have made Nvidia “the central bank of AI,” and dealing directly with President Donald Trump and Chinese leader Xi Jinping at a moment when access to the world’s most advanced AI chips has been called “the defining strategic question” facing the two superpowers. On Sunday, Sequoia’s Shaun Maguire, a Huang supporter, called him “irreplaceable for America’s AI leadership.” The nod to earlier US intelligence warnings that China is targeting US tech leaders will serve as a cautionary tale for many of Huang’s peers in Silicon Valley.

Meanwhile, any challenge to investors’ confidence in Huang’s leadership, or any allegation that his personal relationship influenced Nvidia’s lobbying in Washington, could have serious implications for his position and his company’s valuation. Nvidia’s stock already took a beating from a wider reversal in chip stocks as US voters’ protests against data centers shook confidence in the market’s AI trade. Extramarital affairs and relationships that were not disclosed to board members have felled CEOs at companies as prominent as Boeing and McDonald’s in the past.

In many cases, boards and investors focused on ethical breaches, such as executives using company funds inappropriately or advancing the careers of romantic partners who reported to them. The allegations about Huang are more serious, but the reaction to those past peccadilloes offers some clues to what Nvidia can now expect. Directors will now face questions about when it knew of the allegations, and whether the earlier investigation it reportedly conducted was thorough enough.

That could test a board that is short on corporate heavy-hitters — there’s not one sitting CEO on the board other than Huang — or people with deep experience of national security or political crisis management. The company can also expect litigation from shareholders, and possible regulatory action, if Huang or the board held back material information from investors (Nvidia previously denied the allegations of an affair to media outlets). And Huang is unlikely to avoid high-profile investigations from Congress, whose incoming Democratic-led majority is suspicious of Big Tech CEOs and is already preparing a rash of subpoenas for Trump allies.

Huang, unlike many other Silicon Valley founders, is not in control of his own fate: He has run Nvidia as if he fully controls it, but he lacks the dual-class stock that shields tech founders like Meta’s Mark Zuckerberg and Alphabet cofounders Larry Page and Sergey Brin. While his near-4% stake gave him a net worth of $155 billion at Friday’s close, it does not protect him should the board or investors try to oust him. For now, that outcome looks unlikely. There is no obvious successor waiting in the wings, lawmakers are fully aware of Nvidia’s strategic significance to the US, and Wall Street knows Huang as a brilliant founder who has made fortunes for his shareholders.

Bill Ackman, the hedge fund manager, was among the investors urging support for Huang on Sunday. Huang has promised to cooperate with the investigation his board has launched. He has no choice. Investors who struggle to imagine Nvidia without him have $4.5 trillion reasons to hope and expect that he rides out this crisis.

But his serious lapse in judgment will dent confidence in one of the world’s most consequential companies, at the very moment when investors have shown that their faith in the market’s AI growth story has limits.