Nvidia’s Board Prepares to Oust Jensen Huang

nvidia's board prepares for a future without jensen huang we'll get the latest from san francisco and ask analysts what a leadership shake-up could mean for america's chip leader and the broader ai trade and democrat scott colombe makes history as he emerges victorious in mississippi's senate race it's not something that i did y'all it's something that we did it's thursday november 12th i'm sondra kilhoff for the wall street journal filling in for luke vargas and here's the am edition of what's news the top headlines and business stories moving your world today we are exclusively reporting that nvidia's board is preparing to oust jensen huang as ceo leaving one of the world's most valuable companies in need of a new leader our luke vargas spoke to the journal's deputy tech editor jeff berkovisi jeff prior to this we had known nvidia's board was invested in the world's most valuable companies and investigating reports about whether huang had been targeted by foreign intelligence during his affair with a suspected chinese agent i presume more has happened here for them to sort of move from investigating on to pursuing a leadership change tell us what they have learned that's right over the course of this week news has continued to come out what we learned wednesday was that jensen huang was having another relationship with a woman who was a senior executive at nvidia running the company's health care business according to a person familiar with the matter so that means he was not just having a relationship with the uh the woman who is suspected of sending information to china alice huang with his new information the board is now set to meet to determine jensen huang's future and we should note that kimberly powell the senior executive at nvidia who runs the company's health care business didn't respond to requests for comment i mean where would this leave nvidia huang after all is the company's co-founder in many ways the poster boy of american ai he's not just a you know ceo brought in in recent years to lead a turnaround or someone who doesn't have very deep roots at the company far from it no he's certainly not a new ceo in fact he's the only ceo the company's had in its entire existence and the company has really formed around him and his unique vision for uh for running a company it's it's an unusual culture in many ways it's a company that uh doesn't have a 60 direct reports a huge number of them he doesn't have a conventional number two he doesn't have a successor and has said that he doesn't think that a company should anoint a successor and that's centralized a lot of risk for the company in him as the company has acknowledged in its financial disclosures the company has acknowledged what they call key man risk that a failure to engage in effective succession planning could really uh hinder the company's competitiveness that was journal deputy tech editor jeff berkovisi now investors are responding decisively to last night's news sending nvidia's stock down as much as eight percent in off hours trading one of its worst pullbacks in recent years and analysts are having their say too city has slashed its price target for the company by some 20 citing huang's central role in setting product vision and strategy and maintaining relationships with customers and investors saxo bank's chief investment strategist charu chanana echoed that sentiment telling me that huang's outsized impact on the stock was hard to quantify we've seen a bit of a price correction and there are some questions around whether this is a dip good enough to buy but on the other hand we do have some of the major banks and brokerages really cutting their price targets and downgrading the stock because this is uncertain territory right nobody accounted for an exact jensen premium in the stock so i think the valuation risk for the stock has absolutely gone up and with the kind of uncertainties uh we are facing right now it is hard to call it a bottom already okay so it's not clear whether nvidia's stock has bottomed out yet but given that we just had a major sell-off in ai stocks last week is there a risk that nvidia's problems could hurt the wider market i think this could be a little bit of a turning point especially because we were already evaluating like you said right the questions around whether ai spending currently does justify the kind of returns we're making there or not the kind of impact the high bond yields are having on the ai trade and how difficult financing is getting and things like that we're already under the scanner now what changes with this whole nvidia crisis is do customers really maintain their ai spending i mean i don't think we're at a point where we can say that ai spending is going to be pulled off because of this leadership crisis at nvidia so if that does not happen what happens is that ai spending just diversifies into other chip suppliers like amd like broadcom for example so overall the ai story still remains intact but you get a more broader participation especially from the market so i think that's a big thing that we're seeing right now and i think that's the chip manufacturer space and the and the infrastructure space and i think that is rather in the long run a more healthy correction for the market so potentially a healthy correction on the way here we are seeing amd and broadcom rallying this morning that said nvidia suppliers like micron other big tech companies like coreweave they're sliding ahead of the u.s open chanu it seems like this highlights the outsized impact and role that nvidia has played in the global ai industry absolutely i mean i think that's a big thing that we're seeing right now and i think that's i think of course given that nvidia has been so central to the whole ai build out it has played a critical role but as a result of that what has also happened is that nvidia has become the most influential stock in the global equity market and given the kind of concentration risk that has meant for investors who may not even directly hold an nvidia stock right they're holding a nasdaq an s&p 500 or semiconductor stocks globally and they've been exposed to nvidia in a big way and that is i think one of the the problems that have come because of nvidia size and influence in the sector we've also seen a lot of circular financing deals with nvidia at the center of that and i think that again is a little bit of a risk to the ai story because if those deals were supposed to be questioned on the back of the governance risk the company is facing right now that could send some ripple effects throughout the sector as well at the same time the nvidia news is creating a political fire storm prompting the white house and members of congress to question huang's ties with china and president trump as journal tech reporter amit ramkhamar explains people inside the white house are very concerned because they have been warning president trump about his close relationship with jensen wang going back to the start of last year many officials focused on security were concerned that jensen wang wanted to sell nvidia chips directly to china and do business with so many companies in southeast asia that were using nvidia chips to essentially sell computing power to chinese customers and in those deals the government was set to receive a cut of the sales that close relationship with president trump and the nvidia ceos now under a microscope you have lawmakers from both parties calling for a full investigation into jensen wang's relationship with alice wong of mega speed and we'll see what happens with the board's decision to potentially oust him and who might even replace him and you have democrats now really saying that they want all the administration personnel to preserve the records in their interactions with jensen wang including president trump and that that might be a first step to launching full congressional investigations this nvidia story and saga has shows really no signs of letting up and it continues to change by the hour well armit said it this is a rapidly developing story make sure to check out wj.com where our tech team will bring you updates and exclusive analysis on nvidia throughout the day now coming up we've got the latest on the latest on the latest on the latest on the latest on the latest on the latest on the latest arneal meta says that with a number of mississippi's house races this year also looking much more favorable for democrats than they did just two years ago the state is likely to receive more national attention going forward cologne was on ms now the other day and he said that democrats really need to include the south in their future and he also argued on social media that election forecasters who were saying that his race was strongly favored to go to the republican were making it really hard for him to fundraise if you look at data from ad impact which is the adtracking firm the projected spending this cycle on the mississippi senate race was around 10 million dollars and that might sound like a lot of money but it's only a fraction of what was spent in other competitive senate races this cycle like maine and alaska the fact that a democrat can win the mississippi senate race makes it clear that it wouldn't be surprising if that number goes much higher in future cycles for comparison ad impact says republicans and democrats spent more than seven million dollars in michigan's senate race on the final day of campaigning alone and finally say you're working in ai and are looking for a new job while it can be tough to land a number of roles in the current labor market competition for top ai talent remains fierce leading to bigger pay bumps for those able to land coveted positions career and workplace reporter ray smith says that's partly due to the fact that ai is being rolled out across industries faster than companies can adjust their pay structures creating an employee flight risk unless business is able to afford it businesses are willing to pay up even though the tech industry has faced a brunt of u.s based job cuts this year, the AI boom is prompting employers to pay more to entice certain professionals from their current jobs. These kinds of specialized professionals include tech workers with AI proficiency, as well as electricians and construction workers. Agentic AI specialists can land measurable salary premiums for switching jobs. Meanwhile, many new construction and manufacturing jobs in the U.S. involve building data centers and the chips used to power them, so that's driving up pay for workers on those projects. The bottom line is, though it's a tough job market and it's hard to land a new job, for certain tech roles or roles that are tech-adjacent, it's possible to not only land a new role, but to get a significant pay increase as well. But while the tech industry shows signs of hope for some, elsewhere many Americans are holding on to their jobs for dear life. Federal data shows that the quit rate has been at or below 2 percent for more than a year, as fewer workers believe there's value in pulling back from their current roles. Though some, including the journal's own Callum Borchers, are bold enough to walk away. Well, my most recent and last column was really inspired by my own experience. I'm getting ready to transition into a different chapter of my career and life, where I'll be doing more parenting and a little bit less working. And it's a little bit scary, and it occurred to me that a lot of readers may be grappling with similar experiences. Callum said one thing that helped give him that confidence was hearing from others about how to leave the door open to a career comeback. If you do decide to step away, there are a few things that you can do to try to leave that door open. Number one is just to leave on good terms, right? There's no reason to burn that bridge on the way out. You can keep on networking with them. So that's another step. The second thing is to keep in touch with the folks that you used to work with in the past and continue meeting new people. And then when it comes to the mentality, so yes, maybe you would regret being unable to get your job back, but would you have even more regret about not taking the leap? Will you wonder, what if I had taken that career break? What if I had started the business I always wanted to do? When my kids are grown, will I look back and wish I had spent more time with them? So those are some of the things to weigh as you're deciding what the risk and reward might be. And the final thing mentally is to remember, especially if you're in a high-level role, you're a catch. And that can be a hard thing to remember because if you're used to competing for these jobs or even going back into college, you're competing for seats that are hard to get. You sort of internalize this idea that you're lucky to be there. But if you're a high-caliber, high-performing type of person, you don't grow on trees either. And so in the same breath, the company was lucky to have you. And to read Callum's final on-the-clock column, check out the link we've left in our show notes. And that's it for What's News for this Thursday morning. Today's show was produced by Hattie Moyer and Luke Vargas. I'm Sondra Kilhoff for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening. Thank you.