Nvidia is facing the biggest crisis in its 33-year history. Founder Jensen Huang accused of multiple affairs, including with a direct report, and Alice Huang, an alleged Chinese spy who also worked with a major Nvidia customer, Megaspeed, based out of Singapore, that put her in the middle of a sprawling effort to accumulate AI chips across Southeast Asia and possibly get them into the hands of restricted Chinese companies. Now he's out as CEO.
Nvidia CEO Jensen Huang has officially resigned his post following reports of a second affair in one of the biggest shakeups in corporate America's history.
The entire story feels like it's a script for a movie. The fact that she may be a spy, that she worked for a distributor or a neocloud that was supplying, potentially, compute into China. If there was anything that breached the trust of the country or that breaks the trust of how he handled company secrets, I don't know that you can survive that.
The relationship between Jensen Huang and Alice Huang dates back to 2023, a turbulent time for Nvidia, as it navigated the first in a series of strict export controls that the Biden administration placed on sending its most advanced chips to China in an effort to keep the world's second-largest economy from leapfrogging the U.S. in AI. It's also the year we sat down with Jensen Huang for an in-depth interview about the history of his company. That same day, we also interviewed another Nvidia executive who, it turns out, he also reportedly had an affair with.
This isn't the first time Nvidia has found itself teetering on the edge of an uncertain future. It nearly went bankrupt a handful of times in early years, when Jensen Huang bet the company on impossible-seeming ventures.
Every company makes mistakes, and I make a lot of them, and you know, some of them puts the company in peril, especially in the beginning because we were small and we're up against very, very large companies and we're trying to invent this brand-new technology.
Three decades and many AI chips later, and Nvidia's place at the very center of all AI computing sent its stock up 17-fold at its peak and gave Jensen Huang a net worth over $150 billion before it all took a tumble. That's remarkable for a man who dreamed up the idea with two fellow engineers out of a Denny's in the early 90s in hopes of bringing better 3-D graphics to PCs for better video games.
His humble beginnings certainly played a role in him becoming great. But you know, he's been on the cover of Time Magazine. I think by now he certainly knew he was important as he flew around the world with the president of the United States.
As investigations by Nvidia's own board and government entities from House committees to the FBI dig into exactly what happened here, we take a look back at Nvidia's history from our own interviews with Jensen Huang and other company leadership to get a clear picture of where Nvidia stands today and all it stands to lose.
In the first months of the AI boom, as Nvidia was on the cusp of becoming a household name, Jensen Huang had long-term aspirations for leading his company. You are the longest-running tech CEO. Is there any end in sight?
Well, as you could tell, I'm sprightly and quite enthusiastic and energetic, yet I'm surrounded by amazing people. They keep me inspired. And I feel that we could do great things together. I feel that I'm making a real contribution to the company and to them. And so I think for so long as I believe I could do that. And I don't know exactly how long that's going to be, but three or four decades, I would say. And so hopefully, hopefully I'll get to enjoy this for a very long time.
Three years later, the question isn't whether Huang's contributions were meaningful, but whether his mistakes were, in fact, just that.
The fact that he may have used his influence in some way to help gain more access to compute in a region where it was clearly sensitive or not supposed to be available at all. In many cases, that's the question, because there is a chance that Jensen has done nothing different than Jeff Bezos and Sergey Brin and Bill Gates, and made a mistake in his personal relationship that has cost him dearly, reputationally and financially.
Because until now, Nvidia was one of the rare Silicon Valley giants that still had its founder at the helm.
Jensen is so important to this company. The company has been built in his light. It's a reflection of who he is. The autocratic style that he imposes, the leaders that he has selected that are basically the execution of his will inside of the business. You can't send him off and just bring Jensen to it.
63-year-old Jensen Huang immigrated to the U.S. from Taiwan as a kid and studied engineering at Stanford and Oregon State, where he met his wife, Lori Mills, marrying her in 1985. In the early 90s, Huang met fellow engineers Chris Malachowsky and Curtis Priem at Denny's, where they talked about dreams of enabling PCs with 3D graphics, the kind made popular by movies like Jurassic Park at the time.
If you go back 30 years, at the time, the PC revolution was just starting and there was quite a bit of debate about what is the future of computing and how should software be run. And there was a large camp, and rightfully so, that believed that CPU or general-purpose software was the best way to go, and it was the best way to go for a long time. We felt, however, that there was a class of applications that wouldn't be possible without acceleration.
The friends launched Nvidia out of a condo in Fremont, California, in 1993. The name was inspired by envy for next version and invidia, the Latin word for envy. They hoped to speed up computing so much everyone would be green with envy. Data center chips remain its primary business, led by industry-leading graphics processing units originally sold as cards that plug into a PC's motherboard and now dominate in data centers, too. They accelerate, add computing power to central processing units, CPUs that primarily come from Intel and AMD, although Nvidia now makes its own CPUs as well.
You know, there were one among tens of GPU makers at that time. They are the only ones, and them and AMD actually, who really survived, because Nvidia worked very well with the software community. This is not a chip business. This is a business of figuring out things end to end.
But at the start, its future was far from guaranteed.
In the beginning, there weren't that many applications for it, frankly, and we smartly chose one particular combination that was a home run. It was computer graphics, and we applied it to video games.
Now, Nvidia is known for revolutionizing gaming and Hollywood with rapid rendering of visual effects. Nvidia designed its first high-performance graphics chip in 1997. Designed, not manufactured, because Huang was committed to making Nvidia a fabless chip company, keeping capital expenditure way down by outsourcing the extraordinary expense of making the chips to TSMC.
On behalf of all of us, you're my hero. Thank you, thank you, thank you. Nvidia today wouldn't be here if, and nor the other thousand fabulous semiconductor companies wouldn't be here if not for the pioneering work that TSMC did.
In 1999, after laying off the majority of workers and nearly going bankrupt to do it, Nvidia released what it claims was the world's first official GPU, the GeForce 256. It was the first programmable graphics card that allowed custom shading and lighting effects. By 2000, Nvidia was the exclusive graphics provider for Microsoft's first Xbox.
Microsoft and the Xbox happen at exactly the time that we invented this thing called the programmable shader, and it defines how computer graphics is done today.
Nvidia went public in 1999, and its stock stayed largely flat until demand went through the roof during the pandemic. In 2006, it released a software toolkit called CUDA that would eventually propel it to the center of the AI boom. It's essentially a computing platform and programming model that changes how Nvidia GPUs work from serial to parallel computing.
Parallel computing is, let me take a task and attack it all at the same time using much smaller machines, right? So it's the difference between having an army where you have one giant soldier who is able to do things very well, but one at a time, versus an army of thousands of soldiers who are able to take that problem, right, and do it in parallel.
You know, they quickly realized that the smartphone market wasn't for them. So they exited right from that.
