The sudden resignation of CEO Jensen Huang of AI semiconductor giant Nvidia due to allegations of adultery is sending shock waves from Silicon Valley to the U.S. Congress.
Currently, Nvidia is receiving intense attention from the U.S. Congress regarding allegations that one of the people involved in CEO Hwang's alleged affair was a Chinese spy.
NVIDIA, which was considered one of the world's most valuable companies riding the AI craze, made headlines every day due to this scandal, and its market capitalization of $550 billion (approximately 732 trillion won) evaporated in just five days.
Chief Financial Officer Colette Kress, who was appointed interim CEO, called an emergency executive meeting to discuss the company's future.
Currently, his scandal has gone beyond a controversy over work ethics and has escalated into an issue in which U.S. politicians are questioning Nvidia over suspicions of threats to national security.
CEO Hwang, who has been the public face of Nvidia since 1993, admitted to being "unfaithful" to his wife on the 8th, after reports emerged that he had an affair with Alice Hwang, who is suspected of being a Chinese spy.
On the 11th, it was reported that he was also having an affair with an Nvidia executive.
Alice Huang served as an executive at the Singaporean company ‘Megaspeed’. According to the New York Times, he is suspected of being a Chinese intelligence source.
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However, China dismissed these suspicions, saying they were nothing more than slander.
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On the 12th, U.S. Attorney General Todd Blanche said that the Justice Department had not yet reached any conclusion about whether Alice Huang was a Chinese spy.
Democratic lawmakers on the House Foreign Affairs Committee, including Senator Elizabeth Warren (Democrat, Massachusetts) and Senator Chris Coons (Democrat, Delaware), publicly demanded that CEO Hwang directly explain the scandal to Congress.
A Senate aide told the BBC that CEO Hwang could receive a subpoena if he refuses to appear voluntarily.
Nvidia has continued to refuse to express its position since the 11th, and CEO Hwang's personal spokesperson also declined to comment on the 12th.
Meanwhile, according to American media, the person pointed out as CEO Hwang's second affair partner was Kimberly Powell, a long-time executive at Nvidia, and was known to be CEO Hwang's direct subordinate.
Multiple sources told the BBC that Nvidia employees had already noticed that the two had an unusually close relationship.
Meanwhile, despite the company's announcement that it had begun its own investigation to determine whether CEO Hwang "was a target of a foreign intelligence agency" after the first suspicion of infidelity arose, the prevailing view was that he would overcome this crisis safely.
An employee currently working at Nvidia told the BBC that when the initial reports of the affair came out, most employees did not consider it a big deal. Then, as additional suspicions of an affair with a company executive arose, employees began to say, "This is ridiculous."
Another Nvidia employee said he had been told not to speak to the media or comment publicly about the situation.
Many Nvidia employees are known to have made millions of dollars in profits by selling their stocks thanks to the rising stock price.
Nvidia said it had "no reason to believe that national security or company secrets have been compromised" but promised to review all information available in an independent investigation.
Jensen Huang, who is considered a key leader in the growth of the artificial intelligence (AI) industry, is the person who led Nvidia's remarkable growth. Currently, the global AI industry relies heavily on high-performance semiconductors manufactured by NVIDIA.
Initially, it was a semiconductor for computer games, but over the past four years, as AI technology has developed rapidly centered on chatbots and large-scale language models, AI development companies have come to need large quantities of NVIDIA's semiconductors that can process large amounts of data.
Currently, NVIDIA is looking for an official successor. On the 12th, CFO Kress was appointed as interim CEO.
Several tech industry insiders interviewed by the BBC this week said Hwang's downfall had become a hot topic in the San Francisco Bay area, which is home to a high concentration of tech employees, executives and billionaires.
Meanwhile, he is not the first tech giant to be embroiled in allegations of infidelity.
Over the past 10 years, Bill Gates of Microsoft and Jeff Bezos of Amazon have also been revealed to have had affairs. Both were divorced from their wives at the time.
CEO Hwang has been married to his wife, Lori Hwang, for 40 years, and their two children also serve as executives at NVIDIA.
This week, Nvidia recorded its biggest five-day decline since it went public 27 years ago.
Over the past five years, its market capitalization has increased by more than 470%, reaching a peak just a few weeks ago, but is currently down 31% from its peak amid growing uncertainty across the technology industry.
Given Nvidia's massive size and success in recent years, this drop in stock prices could have a direct impact on the accounts of ordinary Americans.
NVIDIA's market capitalization accounts for about 7% of the 'S&P500', the representative US stock index, and index funds that follow this index are popular among US retirement savings accounts.
Therefore, Americans' retirement account balances are bound to rise and fall depending on stock market fluctuations.
