Nvidia CEO Jensen Huang steps down in big blow to AI boom

BOSS. NVIDIA’s CEO Jensen Huang attends a media roundtable meeting in Singapore, on December 6, 2023.

Edgar Su/Reuters

The departure could also have far-reaching consequences for US chip export policy, given Huang's push to preserve access to the Chinese market and his close ties with US President Donald Trump

AT A GLANCE

• Nvidia CEO Jensen Huang is stepping down amid controversy over alleged affairs and potential espionage connections, leaving the company in uncertainty.
• Colette Kress will serve as interim CEO while Nvidia searches for a permanent replacement, and the company has appointed Harvey Jones as its first board chairman.

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Nvidia CEO Jensen Huang is stepping down, leaving the AI industry without its biggest champion and clouding the future of the chipmaker he built into an AI powerhouse.

Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, the company said on Thursday, November 12. It named former Synopsys CEO and board member Harvey Jones as its first-ever board chairman.

Huang, who co-founded Nvidia and is its fourth-largest investor with a stake of about 3.61%, will exit the board as well.

Nvidia shares fell more than 10% in premarket trading, and weighed on the broader market.

Pressure had been mounting on Huang in recent days after reports said the 63-year-old, who is married, had an affair with a Chinese businesswoman who US authorities suspect of spying for Beijing.

Nvidia’s board met on Wednesday, November 11, to consider his ouster, a person familiar with the matter said, after reports earlier in the day that Huang also had an extramarital affair with a senior company executive who reported to him.

Huang’s exit plunges the $4 trillion company into uncertainty and threatens to disrupt an AI ecosystem that he helped bankroll by pouring Nvidia’s swelling cash pile back into cloud providers, suppliers and the industry’s biggest labs.

“The risk is not that Nvidia suddenly loses its technology roadmap…that roadmap is largely visible for the next several years. The risk is execution. Jensen has been the chief conductor of an extraordinarily complex system,” said Michael Feldman, portfolio manager at ClearBridge Investments.

“In a world with real bottlenecks, that coordination is a competitive advantage in itself.”

Investor sentiment toward AI stocks has already been shaky as soaring cash burn and rising debt at traditionally cash-rich tech giants fuel doubts over whether the AI boom will pay off.

The departure could also have far-reaching consequences for US chip export policy, given Huang’s push to preserve access to the Chinese market and his close ties with US President Donald Trump.

Trump said on Sunday, November 8, that Huang had “done an amazing job for our country” and that the Nvidia chief had told him he had no idea the Chinese woman he had an affair with was a spy.

Huang’s rock-star status

For years, Nvidia was best known to gamers chasing top-tier graphics. But its chips’ ability to perform many calculations at once has made them the oil of the AI boom and a strategic prize in the US-China race to dominate the technology. It also made Nvidia the world’s most valuable company.

That turned Huang into a rock-star CEO, mobbed by fans in Taiwan and South Korea who ask him to sign books, posters and sometimes even their bodies. Such is his pull that stocks moved at his mere mention of company names at events.

But scrutiny of his conduct has intensified in recent days after reports of his relationship with Alice Huang, a former executive at Singapore-based cloud company Megaspeed, who US authorities have concluded was a Chinese intelligence asset.

The two, who have been photographed together in Taiwan, Singapore and California, are not related.

Washington has also investigated Megaspeed, a coveted official Nvidia cloud partner with priority access to its chips, over suspicions it helped China obtain advanced AI chips restricted under US export controls, according to media reports. Beijing has denied Alice Huang is a spy.

Earlier this month, Nvidia’s board launched a probe, led by independent directors with outside legal counsel, into whether Jensen Huang had been targeted by a foreign intelligence operation. It also expressed confidence in him at the time.

The controversy escalated on Wednesday when the New York Times reported Huang also had an affair with Kimberly Powell, Nvidia’s vice president of healthcare, who reported to him. – Rappler.com