Nvidia co-founder and chief executive Jensen Huang resigned on Thursday, days after the company opened an investigation into reports that he had been the target of a foreign intelligence effort. Chief Financial Officer Colette Kress will serve as interim CEO while the board searches for a permanent successor.

The announcement capped a rapid sequence of events that began with an internal apology and ended, four days later, in the departure of the executive who built Nvidia into the world's third-largest public company. Nvidia said the search will consider candidates from both inside and outside the company.

Who takes over and what the board said?

Kress currently serves as executive vice president and chief financial officer. She agreed to step into the interim role, the company said in a statement.

Board chair Harvey Jones offered an explicit continuity pledge. "The Board has full confidence in Colette and the leadership team, and we expect the company's operations, customer commitments and product roadmap to continue without interruption," Jones said.

That assurance speaks directly to the strategic question hanging over Nvidia: whether a leadership rupture disrupts the product cadence behind its dominance in artificial intelligence chips. The board's decision to elevate the sitting CFO signals an emphasis on operational stability during the transition.

What triggered the resignation?

The resignation followed reports of an alleged affair between Huang and a suspected Chinese spy. Nvidia issued a statement days ago announcing an investigation into Huang in light of reporting that he "has been the target of a foreign intelligence effort."

Huang himself admitted to personal misconduct in an internal message to Nvidia staff, acknowledging he had been "unfaithful to his wife." On Sunday, Nvidia shared that message with ABC News.

"My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry," the message said in part. It did not name any other person.

Addressing Nvidia staff, partners and shareholders, Huang wrote: "My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to NVIDIA and will work to earn back your confidence." Four days later, he resigned.

What did the reporting allege?

The New York Times reported on Wednesday that Huang also allegedly had an extramarital relationship with an Nvidia executive who reports to him. Citing sources within the company, the Times reported that Huang and his colleague were allegedly captured on video being affectionate at a hotel during an Nvidia conference in March. The newspaper said it had not seen the video.

ABC News stated it has not been able to verify the reporting or the alleged video.

The reporting named Jensen Huang and Alice Huang, who are not related. The Chinese government denied the allegations, calling them "baseless and purely slanderous smears against China."

Neither Alice Huang nor her employer, Megaspeed International, responded to ABC News' request for comment after the Times story broke. Alice Huang is currently living in China, Bloomberg reported on Wednesday.

How did the market react?

Nvidia shares tumbled more than 13% at the open of trading on Thursday. The stock recovered part of that loss by the morning, trading down about 5%.

The shock compounded a period of uneven performance for a stock that had already lost momentum. Nvidia shares are down approximately 17% compared with a year ago, even after a 429% gain over the past five years.

Despite the decline, Nvidia ranked on Thursday morning as the third-largest public company in the world by market capitalization, behind only Apple and Microsoft. The company sells most of the advanced chips powering the artificial intelligence boom and has posted strong revenue quarter after quarter, defying skeptics even as political backlash against data centers and concerns about an AI financial bubble have grown.

What comes next for Nvidia?

The board now faces the task of selecting a permanent chief executive, a decision that will shape the trajectory of the most important supplier in the AI hardware chain. The statement gave no timeline for the search.

For interim CEO Kress, the mandate defined by the board chair is narrow and explicit: keep operations, customer commitments and the product roadmap moving without interruption while the succession process runs its course.