Nvidia Board Reportedly Moves To Oust Jensen Huang, Here’s Why Its AI Boom Can Survive Him
Nvidia‘s board is preparing to oust CEO Jensen Huang, The Wall Street Journal reported on Wednesday, but the AI chip giant’s order book and product pipeline are set years ahead, which should keep its business running for the next two to three years even without its co-founder.
Key Takeaways
- Nvidia’s board is preparing to oust Huang over two extramarital affairs, one with an executive suspected of being a Chinese spy, according to the Journal, which cited people familiar with the matter
- The board could meet as soon as Wednesday to decide his future, and Nvidia has not publicly commented on the report
- Nvidia shares fell 7.6% to $160.52 in after-hours trading, after closing up 2.9% at $173.73
- Nvidia made $89 billion from data centers last quarter, up 117% from a year earlier, and expects $108 billion in total revenue this quarter
How Nvidia Got Here
The board announced an independent investigation into Huang on Sunday, led by outside counsel, after reports that U.S. officials had suspected an executive at Singapore data center firm Megaspeed, with whom Huang had a relationship, of working for Chinese intelligence. The board said it had no reason to believe national security or company secrets were compromised and that Huang was fully cooperating.
In a leaked email to staff, Huang wrote: “I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did.” House lawmakers have since asked him to testify, and some are pushing for tighter chip export rules that could cost the industry billions in sales.
Also Read: Google Launches 2 New AI Chips For Bots, Four In A Single Year
What Happens To Nvidia Without Huang
Huang co-founded Nvidia in 1993 and has run it for 33 years, setting its product bets, selling its chips to the biggest tech companies and dealing directly with governments. Nvidia has never named a successor, and Huang has said he does not believe in formal succession plans. That makes him one of the biggest single-person risks of any large company.
- Vera Rubin chips are already in full production at Microsoft, Google, Oracle and others
- Big cloud orders are signed and capacity is booked years ahead
- 75% gross margins and $96 billion of quarterly revenue give it a huge cushion
- Its CUDA software keeps developers tied to Nvidia chips
- No named successor to set the next big product bets
- Huang’s personal ties with customers and world leaders are hard to replace
- Lawmakers want tighter chip export rules after the spy scare
- Google, Amazon and AMD are pushing their own AI chips
Can It Keep Its Momentum For 2 To 3 Years
For the next two to three years, the answer is mostly yes. The chips Nvidia will ship through 2027 are already designed, its biggest customers have placed orders, and its latest guidance already assumes no data center sales to China. A new CEO would inherit a business that is still growing fast, so a sudden collapse in sales is unlikely.
The bigger risks are slower and harder to see. Huang has been the one who spotted each next wave, from gaming to AI, and who personally sealed deals with tech chiefs and governments. Without him, Nvidia could lose some of that edge in the later years, and any export crackdown triggered by the scandal would hit sales directly. Nvidia reports its next quarterly results on Nov. 17, which will be the first test of how customers and investors see it after Huang.
Read Next: Nvidia Board Launches Probe Into CEO Jensen Huang Over Foreign Spy Report
