Jensen Huang’s exit leaves Nvidia facing an AI leadership test

CNBC reported that Nvidia co-founder Jensen Huang resigned on Wednesday, leaving the chipmaker that recently passed a $5 trillion market capitalization with chief financial officer Colette Kress as interim CEO and Harvey Jones as chairman after a board inquiry into his conduct and potential national-security risks.

The inquiry followed reports of two extramarital affairs: one with an employee and one with Alice Huang. People briefed on U.S. intelligence said China’s Ministry of State Security recruited Huang’s former romantic partner to gather information on the CEO. Nvidia did not respond to multiple requests for comment.

How concentrated was Huang’s power?

Michael Dell described Huang as a “visionary of the AI age.” Deutsche Telekom CEO Tim Höttges said a photo with Huang produced more media coverage for his company than its iPhone launch. During Salesforce’s annual Dreamforce keynote, Marc Benioff said: “Jensen, we’re all following you, bro,” as they moved through the audience.

CNBC reported that Huang joined President Donald Trump on Air Force One in May for a China trip to meet President Xi Jinping. Three months later, he brought six major names to Nasdaq and announced a proposed $500 billion AI buildout plan on CNBC.

As Nvidia became the first company to pass a $5 trillion market capitalization, the 63-year-old CEO served as the public face of the company powering the AI boom. His links to government, investors and customers made his exit a market event, not just a personnel change.

His visibility was unusual because his decisions reached product supply, capital and national security at once.

Who controls Nvidia now?

Nvidia’s board named Kress interim CEO and Jones chairman as it searches for a permanent successor. Huang had co-founded the company 33 years earlier and run it as a singular leader with no second-in-command, leaving the board to replace both strategy and operational authority.

Former Cisco CEO and startup investor John Chambers told CNBC’s “Fast Money” on Wednesday: “How companies handle a crisis determines their future. How they handle this will determine if they’re a great company and a great leadership team beyond one person.”

The immediate issue is whether Kress can direct Nvidia without the CEO who chose chip allocations, approved major financing and personally maintained its most important relationships. Those duties were concentrated in Huang rather than distributed through a durable management team.

Nvidia’s leadership test is about continuity, not just finding another famous name.

What is the market expecting?

CNBC reported that Nvidia’s stock is on pace for a sixth consecutive weekly decline, its longest losing streak since 2012. The stock fell 9% last week after midterm elections produced sweeping Democratic victories in both chambers of Congress and dozens of ballot measures that could slow new data-center construction.

Nvidia reports quarterly results on Tuesday. LSEG analysts project 92% year-over-year revenue growth to $109.2 billion, according to CNBC. That figure is 18-fold higher than the same quarter in 2022, just before OpenAI launched ChatGPT and began the generative AI era.

CNBC called the expected growth historic for any business and especially striking for a company that spent most of its first decades as a niche technology provider for video games. The forecast leaves little room for the board’s leadership turmoil to distract from a business still expanding at extraordinary scale.

The earnings bar is high even as the market starts to question Nvidia’s leadership.

How did Huang control the AI chip market?

Huang founded Nvidia to make graphics chips for computer games and rendering. In the early 2000s, he and other executives saw a chance to use GPUs for computationally intensive work; CNBC says that pivot made Nvidia the leading AI chip company and a key U.S. defense asset.

Huang became the final decision-maker for where GPUs went, when they shipped and who received them. Amazon, Google, Meta and Microsoft bought large volumes for their own AI services and cloud customers, while OpenAI bought GPUs for powerful models and consumer apps.

Nvidia also widened its market by reserving compute for neoclouds such as CoreWeave and Nebius, investing equity and helping them build GPU-rental businesses. Oracle bought billions of dollars of GPUs and took on heavy debt. Elon Musk’s xAI, now part of SpaceX, did the same to build Grok, then rented spare capacity to Anthropic and Google.

Huang wanted Nvidia to become the global standard. Last year, he required Oracle to buy additional Nvidia networking hardware to receive allocations of state-of-the-art Grace Blackwell chips, according to two people involved in the private negotiations.

In August, Nvidia said it would provide up to $105 billion in financing for an OpenAI data center in Ohio that could be the world’s largest of its kind.

Chris Miglino, CEO of neocloud Axe Compute, said: “He created the product that started the industry. Without his leadership we may be many years behind where we are today with AI chip technology, which is the driving force behind the neocloud market.”

Huang’s leverage came from controlling scarce supply, financing and standards at the same time.

How did China become a security risk for Nvidia?

Huang’s ambitions reached well beyond the United States. China was difficult for Nvidia during the Biden administration and became virtually off-limits after President Trump imposed strict export controls in his second term; CNBC said Huang’s aggressive pursuit of the market may have contributed to his undoing.

CNBC, citing people briefed on intelligence and a New York Times report, said Alice Huang had business ties to Megaspeed International. The Singapore-based cloud computing firm is an Nvidia customer under scrutiny over suspicions that it helped move billions of dollars in restricted Nvidia chips into China.

The affair now sits at the center of a national-security dispute. Many U.S. lawmakers have demanded investigations and Huang’s resignation. Senate Banking Committee member Kevin Cramer, R-N.D., raised the issue on Wednesday.

Cramer told CNBC, right before Huang resigned: “What bothers me at the end of it is what we don't know is what she knows about him that can be utilized. This is a guy that's right now so vulnerable to extortion, blackmail. I just don't think, as a national security matter, we can run the risk.”

The unresolved questions involve both corporate conduct and the integrity of U.S. chip controls.

Can Nvidia keep Huang’s deal network running?

Huang kept leading Wall Street figures on speed dial and turned GPUs into what he called an “investable asset,” broadening the pool of financial backers. He also maintained personal relationships with OpenAI CEO Sam Altman and SoftBank’s Masayoshi Son, according to CNBC’s account of his influence.

His top lieutenants were finance chief Kress and Vishal Bhagwati, head of corporate development, but sources said Huang made the biggest decisions. When Nvidia needed a financial backstop, three people said the person behind Huang was his son-in-law, Nico Caprez, the company’s vice president of global AI infrastructure growth.

While Nvidia invested cash in fledgling startups, Huang ran an unusually centralized pitch process at the company’s Silicon Valley headquarters. Could be 30 employees attend a startup meeting, yet only Huang asked questions, according to people familiar with the process who were not authorized to speak publicly.

CNBC also reported that major project financing relied on Huang’s sign-off. When he traveled, people involved in a deal waited for his plane to land before learning whether they could proceed or needed to renegotiate terms.

Executives across Nvidia’s customers, partners and portfolio companies said Huang often emailed or called CEOs to offer help during difficult periods. One example came after Silicon Valley Bank collapsed in 2023, when Alembic founder and CEO Tomás Puig said his company was “down to weeks of cash and Nvidia was our biggest customer.”

Puig said: “I emailed Jensen, and they prepaid two years of invoices so we could keep the lights on and people kept their jobs.” The pattern continued this week: on Monday, a day after publicly apologizing for being unfaithful to his wife, Huang emailed Fireworks AI’s CEO. Nvidia first backed Fireworks in 2024, and the startup was dealing with high-profile cyberattacks.

That outreach, according to one person with knowledge of the matter, was simply an offer to help. The immediate tests are Tuesday’s earnings report and whether Kress can preserve Nvidia’s supplier, financing and customer relationships without Huang.