Jensen Huang resigned Thursday as chief executive and board member of Nvidia, the company he co-founded in 1993, as the chipmaker grapples with a personal scandal and a corporate insurance shortfall that could leave it financially exposed to lawsuits.
Photos have surfaced showing Huang, 63, embracing Alice Huang, 49, in Taipei, Taiwan, on June 2, 2024. Alice Huang is alleged to be an operative for China’s Ministry of State Security and a former executive at Megaspeed International, a Singapore-based data center company. The photos were taken shortly after Jensen Huang delivered the keynote address at COMPUTEX 2024, where he told the audience, “I want to speak to you in Chinese, but I have so much to tell you. I have to think too hard to speak Chinese. So I have to speak to you in English.”
Jensen Huang is said to have first socialized with Alice Huang in December 2023, with their affair believed to have begun in 2024. He is also accused of relationships with Nvidia vice president Kimberly Powell and another unnamed Nvidia employee, separate from his marriage to college sweetheart Lori Huang.
The fallout has cost Nvidia roughly $200 billion in market value this week alone. Compounding the company’s troubles, Nvidia lacks a standard form of corporate liability coverage that could shield it from the legal costs tied to the unfolding scandal, according to a Financial Times report.
A Gap in Coverage
The $3.92 trillion chipmaker does not carry the full range of directors and officers (D&O) liability insurance typically held by large public companies. This coverage is usually purchased in three parts. Side A protects the personal assets and legal defense costs of executives and directors. Side B reimburses the company for covering those same legal costs. Side C protects the company itself when it is named as a defendant alongside its officers.
Nvidia holds only Side A coverage, meaning the company itself has no insurance backstop if it is sued jointly with Huang.
“For a public company, it’s normal to have Side A and Side B coverage — it’s almost regarded as compulsory. And in the US, most large public companies would have Side C as well, because the exposure is so serious. Everyone gets sued all the time,” Aaron Le Marquer of Stewarts law firm told the Financial Times.
Nvidia is already defending a federal class-action lawsuit filed in California alleging the company and Huang violated federal securities laws by failing to disclose significant national security and regulatory risks.
Huang’s resignation marks the end of his more than three-decade tenure leading the company, which he built into one of the most valuable corporations in the world.
