[Edaily Reporter KIM JUNG YOU ] Jensen Huang (pictured), CEO of NVIDIA, is facing the threat of dismissal. This comes after revelations—first regarding Alice Huang, who is suspected of being a Chinese spy, and now regarding an extramarital affair with a direct subordinate—have come to light in quick succession. As CEO Huang—who founded NVIDIA in 1993 and has led the company for 33 years—faces the greatest crisis of his leadership, the global artificial intelligence (AI) semiconductor market is also being rocked by turmoil.

The Wall Street Journal (WSJ) reported on the 11th (local time), citing sources, that NVIDIA’s board of directors is preparing to dismiss CEO Huang. The board has been searching for a successor with the help of an external firm and is reportedly considering appointing Chief Financial Officer (CFO) Colette Kress as interim CEO while a permanent successor is found. This means that the board, which had expressed confidence in CEO Huang while launching an internal investigation on the 8th, has moved to dismiss him in just three days.

The scandal surrounding CEO Huang’s extramarital affair is spiraling out of control. While an investigation by U.S. authorities is underway amid suspicions that his mistress, Alice Huang—a former executive at a Singapore data center—is a Chinese spy, The New York Times (NYT) has further reported that “CEO Huang also had an inappropriate relationship with Kimberly Powell, vice president of the healthcare division.”

With the allegations of Chinese espionage followed by a series of controversies over internal relationships, NVIDIA’s management appears to be facing a major test. The pool of candidates to succeed CEO Huang remains shrouded in mystery, though market speculation points to Executive Vice President Ian Buck and Johnny Srouji, Apple’s Chief Hardware Officer, among others.

The board of directors stands at a crossroads. If they dismiss CEO Huang, they will have to let go of the founder who drove the stock price up by over 700,000 percent; however, if they keep him on, they will have to endure intense scrutiny from Congress and investors. Pressure from the U.S. Congress is also mounting.

Armina Rosenberg, co-founder of Minotaur Capital, pointed out, “While Cress, who has served as CFO for over a decade, would be the natural choice as interim CEO, the bigger issue is who will lead NVIDIA’s technology roadmap in the long term.”

This crisis has also brought NVIDIA’s management structure—in which authority is concentrated in CEO Huang alone—under scrutiny. Some observers suggest that CEO Huang’s departure could have repercussions extending beyond NVIDIA to the global AI industry as a whole.

In particular, for SK hynix(000660)and SamsungElectronics(005930)—which supply high-bandwidth memory (HBM) to NVIDIA—the leadership vacuum at this key client is a factor that cannot be ignored. This is because NVIDIA’s investment strategy and supply chain policies could change depending on the next leadership. There are concerns that if NVIDIA, which has driven demand for AI semiconductors, were to falter, it could also affect the order outlook for the memory industry.