The board probably did not believe Nvidia would be better run without Huang. It likely concluded that keeping him had become legally and politically untenable.

The important issues weren’t ordinary consumer outrage:

National security: Nvidia’s chips are strategically controlled technology. A relationship with someone suspected of Chinese intelligence ties creates potential leverage, compromise, and security-clearance problems—even absent proof that secrets leaked.

Export-control risk: The woman’s company was reportedly connected to investigations into restricted chip shipments to China. That could threaten Nvidia’s licenses, government relationships, and ability to sell internationally.

Internal governance: A reported affair with a direct-reporting Nvidia executive raises conflicts involving favoritism, compensation, disclosure, harassment policy, and board oversight.

Credibility: If Huang withheld or misstated material information during investigations, the concealment could matter more legally than the relationships themselves.

Political permission to operate: Nvidia depends heavily on Washington’s decisions about exports, antitrust, energy, data centers, and dealings with China. AI customers may be locked into CUDA, but Nvidia is not insulated from government action.

Director liability: Once directors knew about these allegations, retaining Huang could expose them to shareholder suits and accusations that they ignored obvious risks.

Huang’s resignation also lets the company characterize the separation as voluntary, avoid a prolonged board fight, and begin repairing government and employee trust. Nvidia appointed CFO Colette Kress as interim CEO while searching for a permanent replacement.

Tom's Hardware

Your commercial argument is still correct: removing him is enormously costly. Nvidia has no obvious successor, and Huang personally concentrated product strategy, customer relationships, and roughly 60 direct reports. Near-term demand and contracts probably survive; the real danger is poorer long-term technical judgment and ecosystem coordination.

So this was less “customers dislike the CEO” than “the CEO may now endanger Nvidia’s access to the legal and geopolitical system that permits it to do business.” The board was choosing between severe succession risk and potentially existential regulatory, national-security, and governance risk.

(https://autoadmit.com/thread.php?thread_id=5921658&forum_id=2#50252594)