Futures tied to the Nasdaq 100 led Wall Street lower early Thursday as Nvidia shares fell about 6% in premarket trading while its board weighed whether to remove Chief Executive Jensen Huang, Reuters reported. At 5:32 a.m. Eastern, Nasdaq 100 futures were down 0.64% and S&P 500 futures 0.31%, while Dow futures were up 0.12%, according to Reuters.
The board met late Wednesday to decide whether to oust Huang, a source told Reuters, a sharp shift from Sunday, when directors expressed confidence in him and his leadership team. The company had made no announcement as of Thursday morning, The Washington Post reported, and Nvidia did not respond to Reuters’ request for comment. Under Nvidia’s bylaws, Huang can be removed “with or without cause” by a majority of its 11 directors, all of whom except Huang the company considers independent, Reuters reported.
Huang told employees in a Sunday memo that he had been unfaithful to his wife, after reports that he had a relationship with Alice Huang, a businesswoman U.S. authorities allege is a Chinese spy, Reuters and The Guardian reported. President Donald Trump said Huang told him he did not know she was a spy. On Wednesday, The New York Times reported that Huang also had a relationship with Kimberly Powell, a company executive who reported to him; Reuters said it could not immediately verify the report, and Nvidia and Powell did not respond to requests for comment.
Other AI-linked shares also fell before the bell, with Intel, Marvell Technology and Micron down between 1.9% and 2.8% and AI infrastructure firm CoreWeave off about 6%, Reuters reported. In Hong Kong, Alibaba fell more than 6% amid concern that the Nvidia allegations could bring more U.S. scrutiny of chip exports to China, Yahoo Finance reported. Democratic Sens. Elizabeth Warren and Chris Coons asked the administration to preserve documents tied to Nvidia’s chip exports to China, The Guardian reported.
“The market is starting to price Nvidia without its founder as the likely outcome, not a tail risk,” said Armina Rosenberg of Minotaur Capital, which holds Nvidia shares, according to Reuters. Huang, 63, co-founded the company in 1993, owns about 3.6% of its stock and has no obvious successor, Reuters reported.
“The controversy creates an unusually difficult problem for investors, who have spent years concentrating capital in companies considered indispensable to the AI economy,” said Terri-Leigh Bennett, chief operating officer at CMS Prime, Reuters reported. Nvidia is scheduled to report quarterly results on Nov. 17. Investors are also awaiting Friday’s producer price index, and traders see a Federal Reserve rate increase in December as a certainty, with about a 10% chance of a half-point move, according to the CME FedWatch tool cited by Reuters.