Jensen Huang, a Leader of the Global AI Boom, Is Out as Nvidia CEO

(upbeat music) - Jensen Wong, a driving force behind the AI boom, is out as CEO of NVIDIA. - This does create just a vacuum as the trip industry and really the AI industry's figurehead. And a lot of ways Jensen Wong was larger than life. He would go back to his birthplace Taiwan and he would be mobbed by fans. He would meet with top Chinese officials and then he would come back to D.C., like captivate the audience here. I mean, there are very few people that can have that effect. Plus, the Nasdaq Seasaw as investors reckon with what NVIDIA's leadership crisis means for AI. And US home sales hit a 16 year low. It's Thursday, November 12th. I'm Alex O'Sleff for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. (upbeat music) After 33 years as the CEO of NVIDIA, Jensen Wong has resigned. The world's most consequential AI CEO is out after news of two affairs, one with a suspected Chinese spy and another with an NVIDIA employee. It's an glorious end for someone who's credited with stoking the global AI boom. The company, which he co-founded, creates cutting-edge chips that are the central component behind what many believe is the next industrial revolution. That helped NVIDIA become one of the few companies with a market cap of more than a trillion dollars. NVIDIA's market cap is now much bigger than that. As of today's close, it was $4 trillion. Reporter Robbie Whelan, who covers chip makers, told the journal podcast, "Just how big that really is." - I don't think you or I can really even understand get our minds around what it means to you and have a company be worth $1 trillion. Until a few years ago, that didn't even exist. And this is the company at the center of all that incredible growth. And it's because AI is so central to the economy, so central to how people do work these days. And you cannot have the modern AI products that we have today without NVIDIA. - Whang was instrumental in making that happen. But Robbie says that after news of Whang's second affair, the board was worried about what else might come out. - The board heard this news and I think that the impression was, we can survive this first scandal, but gosh, if this keeps happening and this is a pattern, we're really, in a lot more trouble than we thought. And decision was very quickly made to convene an emergency board meeting. And that started in the sort of late afternoon, early evening of yesterday. And I think from the start of that meeting, we were reporting that showed that the board was moving aggressively to push Chenson out. - So what's next for NVIDIA? The board named Finance Chief Collette Cress as interim CEO. It's appointed board member Harvey Jones, a venture investor and chip design executive as its first-ever board chair. And the board is starting a search for NVIDIA's next CEO, looking at both internal and external candidates. Investors and analysts are trying to figure out what an NVIDIA without Whang looks like. For more on this, I'm joined now by WSJ heard on the street writer Asa Fitch. Asa shares of NVIDIA fell 14% when markets opened today, but closed down only 4.3%. Why did those shares recover? - Well, the company's stock is down today. It's been down a bunch since these revelations started come out late last month. But it is still at the center of AI. I mean, if investors really thought that Gentson Wong's outsting was going to sink the company, it would be down a lot more than it is. - Then again, we are seeing analysts lowering their price target for NVIDIA. - A lot of analysts are kind of freaking out to put it bluntly. And it is quite unexpected and pretty shocking to a lot of people. I think but one thread that's run through a lot of these reports is that NVIDIA has been propping up the AI ecosystem for quite some time, you know, funneling cash into it, investing in a lot of companies in the AI space, investing in its own suppliers, its own customers. And then participating in all these big circular financing deals where the chips go into data centers and NVIDIA shares in some of the revenue from those things and all those other stuff. So the aggressive strategy that NVIDIA had been using to finance the AI boom in the AI ecosystem is now under question. And that's causing a lot of concern in the analyst's community. - NVIDIA also announced Colette Cress as NROM CEO. What is the market reaction to that? - Colette Cress is a stabilizing force. I mean, she's been with the company for a very long time. She's very well respected by analysts, by people who watch the company. And she at least appears to be a very by the book kind of person who's just going to run the business as it's been running, most likely. Although we don't really know exactly what she's going to do, that gives investors to give markets a little bit of comfort that there is a steady hand here watching over the company as they start to look for a new permanent CEO. - NVIDIA is reporting its earnings on Tuesday, safe to say there will be a lot of eyes on that. What are you going to be looking at to see kind of where things are headed, reading a little bit of the science here? First thing to say is that the numbers don't really matter at this point. I'm sure the numbers will be good because the quarters are already done and dusted. But the thing that everybody's going to be watching for is how Colette Cress steers the call with analysts after the results are announced. And what indication she gives about how she's going to manage the company through this interim CEO period and how they're thinking about the successor. And it clues even about whether they're going to prefer to find somebody internally or look to somebody externally would be important and interesting. Any sense of what changes she might make to how NVIDIA spends its money, whether they're going to keep doing these big financing deals will be also another one to watch and could really move the stock. - That was the journal's heard on the street writer, Asa Fitch. Thank you, Asa. - Thank you. - Wang built NVIDIA into a global AI giant. And its success made Wang into a worldwide celebrity, one with direct access to President Trump as he's decided on things like whether AI chips can be sold in China. Journal Tech Policy reporter Amrith Romkumar told our tech news briefing podcast that Wang's exit leaves a big hole in the industry. - This does create just a vacuum where someone will likely have to fill Jensen and Wang's shoes as the trip industry and really the AI industry's figurehead who will lobby for things like Hooster Trip Export rules who will develop these key relationships with President Trump and others. And a lot of ways Jensen was larger than life. He had the Black leather jacket on all the time. He would travel around the world. He would meet with top Chinese officials and then he would come back to DC like all in the same week and then captivate the audience here. - You can hear more from Amrith on tomorrow's tech news briefing. While NVIDIA shares fell as much as 14% today before closing down more than 4%, tech stocks overall also bounced around. The NASDAQ immediately sank at the open down about one and a half percent then turned positive in the late morning and then trended lower all afternoon. The index closed down, 0.4%. Some analysts see AMD and Broadcom as potentially taking share from NVIDIA and both those companies climbed today. But most chip stocks tumbled and AI data center company CoreWeave took a hit. And the S&P and the Dow each lost about 0.4% today. Coming up, President Trump reverses course on a deal with Iran and we get into our top arts and culture picks for the weekend. More after the break. The dark cloud over the housing market continued last month. The National Association of Realtors said today that home sales fell by 5.5% in October. The last time sales were this low was August 2010 when the economy was still reeling from the housing bust and the recession that followed. Journal reporter Nicholas Miller says we shouldn't expect the weather to change on our gloomy market anytime soon. - October home sales largely reflect urges contracts that were signed in September. And a bond market selloff had started really driving mortgage rates up very quickly in September. They passed 7%. And so that froze the market. The situation looks quite bleak. Honestly, mortgage rates rose even further in October. So that could mean that further sales data is even worse. And you know, looking into next year, there isn't a lot of optimism. Most economists think that the mortgage rates are going to stay elevated. Most people in the industry realize that the pain is going to continue. - But for potential buyers, it might not be all bad news. If you can deal with a higher mortgage rate, that is. They have the advantage of facing much less competition right now because a lot of buyers have retreated. So for people who are still in the market, that means that they can get concessions from sellers, helping them buy down their mortgage rate. Other times they could even negotiate price cuts. So for buyers, this could present a little bit of an opportunity. - President Trump said today that the US doesn't need a deal with Iran and a post on social media. He added that he would prefer that Vice President JD Vance, who, as we mentioned yesterday, has taken the lead in negotiations, instead work on investigating American cities run by Democrats. It's a sudden reversal for Trump. In recent days, he's told top aides and foreign officials that he was open to Vance restarting talks with Iran. A spokesman for Vance didn't immediately respond to a request for comment. And in Ukraine, its military-grade Starlink satellite internet service has been disrupted again. that effectively disabled some of them. of Ukraine's air defenses against jet-powered Russian drones that are pounding Ukrainian cities. Speaking in Dublin at an international conference today, Ukrainian President Volodymyr Zelensky said he's still trying to get details from the U.S. about why this is happening. "If someone in America is making decision that basically three to Ukrainian territory, as if it is not Ukrainian, then this tells us where things are going. We need to be clear, and never recognize Russia's occupation of Ukrainian territory in any way." SpaceX denied that its service had been limited today. And finally, too many shows to binge, too many books to read, and never enough weekend. Don't panic. Associate editor Brian P. Kelly from W.S.J. Arts and Review is here to help you sort out your plans. Thanks, Alex. This week, we're visiting Easter Island with a couple of foul-mouthed CIA agents, watching Godzilla descended on Tokyo yet again, and digging into a ton of Bob Dylan concerts. Plus, an off-the-beaten path pick for art lovers in New York. Here's what you need to know. "We are the CIA, actually. We're totally the CIA." "We're not the CIA, obviously." Don't you hate when your work buddy can't keep his mouth shut and almost messes up a perfectly good coup? Let's set up for Martin McDonald's Dark Spy Comedy, Wild Horse 9. John Malkovich stars as an aging spook whose dying of cancer and decides to visit Easter Island with his partner, played by Sam Rockwell. As Malkovich grapples with his mortality, and Rockwell deals with his cheating wife back at home, Steve Buschimmi tries to keep the planned overthrow of Chile's IND government on schedule. The CIA isn't the one tearing a country apart in Godzilla minus zero. Tsukashi Yamazaki's follow-up to his popular 2023 monster flick has Japan again being attacked by a giant creature. That earlier film was surprisingly moving, and this one also features elevated storytelling, but it offers plenty of ear-splitting action too. You'll come for the face-off between Godzilla and Gidora, but you'll walk away impressed with the movie's view on family, the cost of vengeance, and even the ethics of science. Both of these films are in theaters now. Bob Dylan fans have a lot, and I mean a lot to be excited about. The Rolling Thunder review is a 39-disc box set that includes every professionally recorded concert from the second leg of Dylan's 1976 tour. We're talking about 381 tracks, 371 of which have never been released. It's enough that'll keep even the most loyal listeners busy for a long time. Two of them are available to stream on Spotify and Apple, and among the tracks there is a really rockin' version of Maggie's Farm, but for the full Dylan experience, you'll need to get the entire collection from Columbia Records and Legacy Recordings. Now sticking with 1976 for a second, our film critic Kyle Smith loved I Play Rocky. It's the new behind-the-scenes drama about Sylvester Stallone fighting to get that boxing movie made. Have someone like Chuck Bronson or we could do Eastwood? It's in theaters now as well. And if Wild Horse 9 leaves you craving another spy story, TV critic John Anderson gives high marks to season 2 Black Doves on Netflix. You can check out both of their reviews right now at WSJ.com. Finally, an off-the-beaten-path recommendation for art lovers in New York. For the first time, there's a joint exhibition of famous mid-century painters Francis Bacon and Willem DeCooning. Bacon was the king of tortured, expressionistic, figuration, and DeCooning was the master of brashly colorful gestural abstraction. Despite their diverging styles, this show proves that they had a lot in common. It's on view at Levy-Gorvey Dayon Art Gallery through December 19th. At your WSJ Arts and Culture drop for this week, I'm Brian P. Kelly. Thanks for listening. We'll catch you next Thursday. And that's what's news for this Thursday afternoon. Today's show is produced by Anthony Bansi and Danny Lewis with supervising producer Tauley Arbel. The arts and culture segment was produced by Alexis Moore and a supervising producer Melanie Roy. I'm Alex O'Salev for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.