❯ Nvidia shares close 4.3% lower after independent inquiry begins, as Jensen Huang remains CEO and skips two industry events

The company moves from responding to reports to an independent inquiryOn November 8, Nvidia’s board announced that a committee of independent directors, assisted by independent outside counsel, would investigate matters involving founder and CEO Jensen Huang raised in recent reports. Nvidia had previously described the contacts as routine. Huang then acknowledged an extramarital relationship and apologized in a letter to employees. The board said Huang would cooperate, that it had no reason to believe company secrets had been compromised, and that it retained confidence in him and the leadership team. Huang remains CEO, and the board has given no timetable for the inquiry.

The market close and changes to his scheduleNvidia shares closed about 4.3% lower on November 9. That day, voice AI company ElevenLabs confirmed to TechCrunch that Huang would no longer appear at its November 11 summit in New York. He was also dropped from the schedule of Anthropic’s CEO Forum. Nvidia has invested in ElevenLabs, and these appearances were among the ways its CEO engaged with AI startups.

Shareholders bring a disclosure caseAfter the market closed on November 9, investors filed a proposed securities class action against Nvidia and Huang in federal court in Northern California. The plaintiffs challenge what the company previously told investors, alleging that its statements about its relationship with customer Megaspeed were misleading. The complaint has just been filed, and the court has yet to rule on the proposed class or the claims. The suit and the board’s internal inquiry are separate proceedings.

Why succession has come into focusAccording to The New York Times, Huang owns about 3.56% of Nvidia, sits on its 10-member board, and has more than 60 direct reports. He often brings employees from different levels into the same project meeting to tackle questions spanning technology, products, and customers. That flat structure gets information to the CEO quickly and puts many decisions involving several teams in his hands. Nvidia has announced no leadership change.

▮ SIGNALThe board’s practical test is whether it can keep chip road maps, systems deliveries, and major customer relationships moving during an independent review when those decisions so often converge on Huang.