What is Nvidia Without Jensen Huang?

Our colleague Robbie Whelan covers big tech companies, including the chipmaker NVIDIA, and he's been working around the clock recently. He was up late last night with an exclusive report that NVIDIA's board was about to make an important decision about the CEO's future. And then. This morning, Jensen Wang, the CEO of NVIDIA, resigned. So how big of an earthquake is this for NVIDIA, AI, and the overall economy? It's really huge. The decision was made last night, but not announced until early this morning. It's really hard to overstate how important Jensen Wang is to the AI revolution that's currently underway. He is the Uber package of the tech CEO who is considered to be brilliant, charismatic, and just wildly successful. And to see him gone from this company, it's not the same company anymore. So what does the AI revolution look like now without Jensen Wang? It's almost like, it's like sort of a Super Bowl winning football team losing their quarterback, you know, right in the middle of the playoffs. That's what it looks like. Welcome to The Journal, our show about money, business, and power. I'm Imani Moise. It's Thursday, November 12th. Coming up on the show, what is NVIDIA without Jensen Wang? This episode is supported by Anthropic, the team behind Claude. In business, a wrong answer can cost you more than a slow one. That's why nine Fortune 10 companies now run on Claude for the work they want to get right. Safety and accuracy are not just line items for Anthropic. That's their whole mission. See how Claude can support your business at claude.ai slash the journal. This episode is brought to you by Indeed. Running a business means dealing with the dreaded hiring process. And the stakes are high when the right hire could make or break your business strategy. But good news. Indeed Sponsored Jobs is here to make things less painful and nerve-wracking. It gives your job post a boost to reach quality talent faster. Plus, it can help put your job in front of exactly who you're looking for based on criteria you set. Like if you need certain skills or certifications. And it works. Sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored jobs. So spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsored job credit at indeed.com slash podcast. That's indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. In July of last year, NVIDIA became the first company in history, to cross $4 trillion in market cap. Then, just a few months later, it became the first company to cross $5 trillion. And leading this incredible growth was Jensen Wong. Let me attempt to describe who Jensen Wong is to NVIDIA and to the AI industry. He is without a doubt the AI industry's best salesman. He is a man who is able to convince presidents that their countries need to be buying his products. He's able to convince U.S. government, government officials, cabinet members, even the president himself, that they need to allow NVIDIA to sell its products in countries in the Middle East, countries in, you know, certain products are allowed in China. Jensen Wong co-founded NVIDIA in the early 1990s, and has been CEO since the beginning. This is a guy who just has tremendous influence over the spread and proliferation, pricing, strategy, even the physical design of servers and data centers. This guy has an incredible influence over that. And it's because what he's designed or what he's sort of launched with the help of his team over the last decade at NVIDIA is a product that's just sort of like, we've never really seen a product category dominated so thoroughly by one company before. Jensen is the guy who knows better than anyone, you know, how these products work, what the market needs, what customers are asking for, what kind of tasks, they want to do and how to meet those needs. And then just also how to sell it, how to make it exciting. He gives these two hour off the cuff speeches called keynotes all the time, where he just will freestyle and he'll make the world of microchips sound like the most fascinating thing in the world. - I just want to remind you, this is a tech conference. All these people lining up so early in the morning, all of you in here, it's great to see you. - And he walks around with his leather jacket, he's very confident, he's very well-spoken. - Can you tell us about his relationship with President Trump and the role he's played in developing the White House's AI strategy? - Yeah, Jensen Huang has been in President Trump's ear. He's been President Trump's top AI advisor, not just on kind of what we should do with AI hardware, like the stuff that NVIDIA designs, but what we should do generally. Should we slow down the AI race? Is AI going to slow down? Is it going to destroy humanity? Are the robots going to take over? All of these crazy questions that people are asking in the last few months and over the last year, Jensen is the one, more than anyone probably, the person who is giving advice to the president about how the United States of America ought to be thinking about those problems. - More than other leaders in the AI world, Huang has been an AI optimist and has pushed for mass adoption and global sales. He's been critical of America's bans on exporting NVIDIA's most advanced chips to China. When Jensen wants something, and usually the thing that he wants is to be able to sell his chips overseas wherever he wants to and make as much revenue as possible. When he wants something, and if there's an obstacle in Washington, Jensen is there and he's talking people through it. He's trying to make people understand his point of view. And his point of view is almost always that it's better for the world and it's better for America if more of the world uses NVIDIA's chips. That's in a nutshell, kind of the argument he's been making for the last several years. And it's been landing. - But in the last few weeks, coverage of Huang focused more on his personal life than his business prowess. - I have to give credit to my wonderful competitors and colleagues at the New York Times who about a year ago broke the story that Jensen Huang had been seen in public a lot with a mysterious woman whose name was Alice Huang. She's not related to Jensen Huang. - Alice Huang was a top executive at a Singapore based tech company called Megaspeed. The company builds AI data centers and has been an NVIDIA customer. According to people familiar with the matter, federal investigators were looking into Alice Huang and Megaspeed. Officials are concerned that Megaspeed could be diverting NVIDIA chips to China. - And what we've learned is that since then, is that this woman, Alice Huang, is not only the former lover of Jensen Huang, they were having an affair that he admitted to, but also that U.S. intelligence is convinced that she was working for the Chinese intelligence services, that she was a spy. - Here's what we know about the Chinese business woman alleged to be a spy for Beijing. - The alleged Chinese spy is Alice Huang. - Jensen Huang had a close relationship with a woman named Alice Huang. - It's unclear what Jensen knew about her potentially being a spy. He has assured President Trump, and Trump has repeated this in public, that, you know, Jensen, said when he took off with this woman, he had no idea she was a spy. We don't know how much of that is true. However, Megaspeed might've been involved in chip smuggling into China, violating export controls. And so it's also a black mark for NVIDIA generally, not just Jensen Huang. - Efforts to reach Alice Huang were unsuccessful, and Megaspeed didn't respond to a request for comment. On Monday, Megaspeed shared a statement on LinkedIn. It said the company maintains high standards and ethical conduct, and that the investment, Investigations by U.S. authorities and others found, quote, no evidence of any violations concerning the illicit transfer of chips or any illegal activities. Beijing denied reports that there was a Chinese plot to spy on Jensen Wang. After news broke of this affair, President Trump came out and defended Wang. I just know Jensen very well. I just think he's a very honorable man. I mean, he built a great company, American company. So after this news broke that Wang is having an affair with an alleged spy, what were your sources thinking? Were they thinking that this was a career-ending affair, or was there a sense that he could survive this because of his importance in the industry? So until Monday morning, my sources were telling me that the board of NVIDIA was convinced that he could survive this scandal. Sure, he may have been entrapped by a foreign intelligence asset. Sure, you know, NVIDIA has had some dealings. With companies that are dubious, everyone kind of knew that already. They had explanations for a lot of it. You know, they talked about how they'd. It ended relationships with that company, you know, last year. And this thing with the affair with the potential spy was very embarrassing. But there was a sense that I got from my sources through Monday that this was something that he could survive. And then something happened that changed everything. So what was the second shoe that dropped? So in the middle of this week, The New York Times published a story saying that Jensen had had an affair with a woman named Kimberly Powell, who is a fairly high ranking executive at NVIDIA who runs their global health care business, health care AI stuff. And what I found very quickly was that the appearance of this story had completely changed the minds of the board. Wow. The board heard this news, and I think that the impression was, wow. You know, we can survive this first scandal. But gosh, if this keeps happening and, you know, if this is this is a pattern, we're really in a lot more trouble than we thought. And so the decision was very quickly made to convene an emergency board meeting. And that started in the sort of late, late afternoon, early evening of yesterday. And I think from the from the start of that meeting, we were on the receiving end of reporting that showed that the board was moving. aggressively to push Jensen out. Powell didn't respond to requests for comment. This morning, Jensen Wong announced he would be resigning. The board and the company thanked Jensen Wong for his, quote, immeasurable contributions to the company and the industry. A lot of people are questioning, you know, how can NVIDIA possibly even think about regaining stability right now? What's going to happen to wake up to this news was sort of earth-shattering. So what is NVIDIA without its rock star CEO? That's next. For business, a wrong answer can cost you more than a slow one. Ulcerative colitis and Crohn's disease symptoms don't pause for the moments that matter. That's why understanding your treatment options, discover what's possible with Trimphia. Trimphia is a prescription medicine used to treat adults with moderately to severely active Crohn's disease and adults with moderately to severely active ulcerative colitis, serious allergic reactions, increased risk of infections or lower ability to fight them and liver problems may occur before treatment. Get checked for infections and tuberculosis. Tell your doctor if you have an infection flu-like symptoms or need a vaccine, talk to your doctor and explore what's possible or call 1-800-7-7-7. Call 1-800-526-7736 to learn more about Trimphia and visit TrimphiaRadio.com. So, Robbie, now that Jensen Huang is out, what is the state of NVIDIA? I would say the state of NVIDIA right now is very unstable. And what needs to happen next is the new interim CEO and the new chairman of the board, they've appointed for the first time in their history a chairman of the board. They really need to work to stabilize things. That's going to mean having lots and lots of conversations with customers, with suppliers, with investors, and it's going to be a rocky period. Tell me more about this new interim CEO taking over. So, Huang is being replaced by an interim CEO. Her name is Colette Kress. She's the first woman to run the company. I mean, it's only had one CEO in its history, which is Jensen. But she's also been the CFO. She's been the chief financial officer of NVIDIA for the last 13 years. She's regarded as very capable. She comes from Wall Street, but also from the semiconductor industry and from the tech industry more broadly. She used to work at Texas Instruments and Cisco. And she is thought to be well-connected with bankers, particularly at Goldman Sachs. And just from what I hear about people, from people who've worked with her, she's thought of as just like super cool-headed and professional. Occasionally, that has translated as kind of maybe, maybe a little reticent and maybe slow to act on certain things. But I think that, like, the general sense I get of Colette, and I've met her a number of times, is that she's very smart. She's somewhat cautious in her approach to strategy. She's not quite the go, go, go, build, build, build, expand, expand, expand kind of mindset that Jensen has. And she's sort of a little bit of a foil to Jensen, or has acted that way over the past couple of years. In an internal note to employees on Thursday, Chris acknowledged, that it had been, quote, an extraordinarily difficult period. She promised to give employees more information in the coming days. In a separate email, the board's first ever chair, Harvey C. Jones, praised Kress and said that, quote, Jensen's contributions to NVIDIA are profound. But replacing Jensen Wong long-term won't be easy. Over the last three decades, he organized NVIDIA into an unusually flat management structure. He had roughly 60,000 employees, 60 direct reports, and had a hand in nearly every part of the business. He also set the agenda for the board, the group of directors responsible for supervising him. When a founder leaves their company for multiple decades, and that company gets really big, really important, kind of a crucial, you know, leg of the stool to the tech market and also to the economy, it's just, I think everyone is just really shocked when things change. There's going to have to be a ton of soul searching done at NVIDIA. about who they want to lead. What kind of person do they want to lead? Do they want somebody whose core capabilities are as a salesperson? Do they want somebody whose core capabilities are as a statesman? I mean, Jensen Wong was all of these things wrapped into one. He was a statesman. He was a negotiator. He was a dealmaker. And so he's not replaceable. In other words, he's one of one. And so when you have a one of one CEO, you really have to think about what direction the company most wants to go. And I think that's going to be the question guiding the search going forward. President Donald Trump has already weighed in on long-term succession. He posted on True Social this morning, quote, There's only one man to take his place. Tim Cook of Apple. A legend replaces a legend. Tim Cook hasn't responded to immediate requests for comment. Can you give us a sense of the financial impact? Of Jensen Wong's resignation? The AI trade, which is to say sort of how investors regard the financial viability of the AI industry, is really suffering right now. NVIDIA stock is down 30% in the last month, 29%, 30% in the last month, which is really alarming. I mean, this is a company that has seen just unbelievable growth. I mean, as recently as a year ago, NVIDIA, each new quarter, we would see, you know, incredible growth. And then we would look at the stock chart, and we'd say, oh, my gosh, it's passed $4 trillion. Now it's passed $5 trillion. And now it's fallen back again under $4 trillion. And these are just like, for most normal people, these are like inconceivable numbers. Like, I don't think you or I can really even understand, get our minds around what it means to have a company be worth $1 trillion. And this is the company at the center of all that incredible growth. And it's because AI is so central to. 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. And what is the broader AI tech industry without Jensen Huang? That's a really good question. The AI tech industry without Jensen Huang means one that moves more slowly. It means one that innovates probably more slowly. It means one that, you know, it's one where data centers don't get. built and get up and running quite as fast. I mean, his impact on that sector alone would be gigantic. And if without Jensen at the helm, it's difficult for me to see things moving quite as fast. And that means that AI models will not innovate quite as fast. It means that there'll be limitations on kind of adoption of AI and how quickly, you know, enterprise customers, which is to say, like, big companies. like financial firms, insurance companies. And it was always thought that if NVIDIA was doing well, the whole industry would prosper. So if NVIDIA is doing well, all boats are lifted. The rising tide lifted all boats and the rising tide was NVIDIA. Investors will get their first look at a post-Huang NVIDIA next week when the chip giant reports earnings. That's all for today. Thursday, November 12th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode from Josh Dossi and Amrith Ramkumar. Thanks for listening. See you tomorrow. Holiday drinks are now at McDonald's. Like the new Red Bull Frosted Cranberry Energizer. It's Red Bull meets cranberry flavors topped with cold foam and sprinkles made to charge your holiday spirit. Now at McDonald's.