The direct-report allegation that turned Nvidia’s spy story into a governance case

The New York Times, citing five Nvidia employees, reported that Jensen Huang also had an extramarital relationship with Kimberly Powell, Nvidia’s vice president of healthcare and a direct report. Per the Times, sources said the two were caught on video being affectionate at a San Jose hotel during a conference earlier this year. Powell, like Huang, is married. Nvidia, Huang and Powell had not confirmed the relationship, and TechCrunch said it asked Nvidia for comment.

It landed while the board was already investigating Huang’s admitted affair with a woman U.S. intelligence alleges is a Chinese spy (investigation), and as House Republicans said Congress could subpoena him (Congress). Within hours the Wall Street Journal reported the board was preparing to oust him (market reaction). The board later accepted his resignation and named CFO Colette Kress interim CEO.

The spy story was murky, contested and wrapped in national politics, and Silicon Valley largely closed ranks. A reported relationship between a CEO and a direct subordinate isn’t murky in governance terms. The Times notes Nvidia, like many companies, has rules discouraging exactly this. A board can’t enforce that policy on everyone else and exempt the person at the top. A third reported affair, with another employee, followed (Reuters).

When a CEO is involved with someone in his reporting line, every decision around that person becomes suspect: promotions, budgets, who gets heard. Colleagues wonder whether the playing field is level, and the subordinate is put in an unfair position whatever the circumstances. That is why these rules exist, and why they matter more at a company this important.

Care is warranted too. These are allegations from anonymous employees, reported by the Times. Powell is a senior executive with her own record and deserves not to be reduced to a scandal headline. Accountability rests with the person who held the power. Nvidia’s healthcare business, a high-profile unit, now faces scrutiny through no product failure of its own.

If the most powerful CEO in AI can lose his job over a workplace-conduct issue, other boards will take note, which is a healthy outcome. Rules for leaders should apply as strictly as rules for everyone else. For the full sequence, see our timeline. More in our Nvidia coverage.