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Back. Pay the most read story on the Bloomberg today: Jensen Huang's last two hours as the CEO of Nvidia, and how it eventually led to his getting to that point, becoming the former CEO of Nvidia. Basically how he resigned to resigning. It's a Bloomberg exclusive. It has been picked up by many on social. Here to tell us about it, Bloomberg News U.S. semiconductor reporter Ian King in the Bloomberg San Francisco news bureau. Ian, thank you for joining us again. I know you've had a busy week.
And worse, these are unusual words for an individual that we usually see being very direct, full of energy, charismatic, and a take-charge kind of guy. What led to the giving up of Jensen Huang? Because you guys, you do some incredible reporting here.
Yeah. I mean, the situation that he put himself in and the situation that the board were forced to deal with was such that there was no choice. There were, of course, rumors and speculation and an admission of an affair with somebody who was at a customer. But then when you factor in an affair with somebody who actually works for the company, something that is explicitly not permissible under the company's stated rules, then the board were in a position where they had no choice but to bring this to him, and that he had no choice. There was no way around this.
Can you describe, and you do it so well in the piece that you wrote with Drake Bennett, the Jensen Huang that emerged in the last few days behind closed doors, the discussions that he had with confidants, with members of the board, his demeanor, the way he was talking versus the Jensen Huang that for so many years you covered as this person who became known as the central banker of the AI industry? I mean, we've all seen him literally. We've all seen him on stage at events, on TV, appearing with the president, and there was nothing apart from absolute control of himself, absolute control of the message, ebullience, that humor, charisma, confidence, and an absolute drive towards a certain goal. And what, according to our reporting, happened in the last few days as he tried to, you know, cauterize the wounds? He tried to accept responsibility. He obviously, in his letter internally, took responsibility for his actions and apologized. But in the end, that wasn't enough. In the end, he wasn't able to remain in control, and according to our reporting, he was reduced to becoming self-critical and to resignation.
Yeah, it certainly speaks to his state of mind, and one can understand why.
I am also curious, as you reported this out, how conflicted the board was. You know, this was Jensen's board. And anybody who'd been at the company for a long time only knew Jensen Huang as the CEO of this company.
Yeah, I mean, several members of that board have literally been on that board for three decades.
This is not a board of people who have been brought in to, you know, hold his feet to the fire and to control a company that, you know, that was in trouble. Everybody's been along for the ride, right? Whether it's employees, whether it's board members, they have all done very well to have had no reason to be exposing him to severe scrutiny, because this company has done extremely well. I think what matters now that he's no longer a part of that company is how the board proceed, and also how the people who used to work for him very closely respond to this, whether they grow, whether they, you know, show up in a way that they weren't previously allowed to publicly, but more importantly, whether they continue to be the world champion engineers, because they are. That's going to determine what Nvidia's future looks like.
I want to talk more about Nvidia's future in a minute, but first, I want to talk about Jensen Huang's future. We learned yesterday that he's hired a high-powered law firm. At this point, what happens next for him?
Well, because of the nature of some of the reports, because of the nature of the interest that's been taken in that politically and also from a legal perspective, he is going to probably find himself in front of committees in Congress or find himself facing potential subpoenas and legal action. So he's going to have to navigate that process. And that, again, it's personally important for him as to whether he even has a future in public life or in professional life. Obviously, he's going to have to reach an arrangement of some kind with his family as to how they feel about what's happened and how they're going to react to it. So all of these things are important. But also in that process, will people who currently work for Nvidia be exposed as having taken actions that were either not against the interests of America or indeed the company?
Ian, that's where I wanted to go. Any feel from your reporting in terms of the scope of the people who might have been aware of Jensen's indiscretions, or who might have been aware of any concerns around Nvidia's relationship with Mega Speed?
I mean, the only reporting that we've done that has gone, you know, that we've published has concerned the general counsel and his potential role in sort of overseeing or trying to broker relief for Mega Speed and to try to sort of lessen the scrutiny that that company was being placed under. That obviously is our reporting, and that's what we've done so far.
Mhm. I, you know, I think one thing that came across in your piece was the distinction between this man who's been traveling around the world on behalf of this company, on behalf of the United States, and on behalf of an entire layer of technology that is sort of undergirding, for many people, not just the U.S. economy, but the future of the global economy. And I think a lot of people right now have a difficult time understanding the development of that without him. Can you help us make sense of that?
Yeah. I mean, you know, when a band loses its lead singer, people say the band can't go on, right? That's the only analogy I can think of. Very few bands are able to do that, right? Very few bands are able to replace whoever is the person out there on that mic night after night. And that's been him, right? Whether it's lobbying politicians, whether it's cajoling other companies, whether it's publicly showing up at other companies' events and saying, here's some money, whether it's his own events, you know, whether it's his responsiveness to whatever the zeitgeist, whatever direction the wind was blowing in terms of public opinion, in terms of the industry's opinion about where AI was going. He's been that. He's been the person that everybody's trying to. Clearly, he's not in a position to do that anymore. Is it a good thing that he's gone? We will see. But, you know, going forward, I'm more focused on how this company responds, how these people react.
Yeah, I agree. It's like, okay, so now what? Speaking of now what, the Financial Times is out talking about the possibility of Arm CEO Renee Haas, who spent time at Nvidia, which shouldn't surprise a lot of people.
Yeah. Given the reporting that Ian has done and our team has done about sort of the short list of internal and external candidates, you're absolutely right. Like, you know, so these names are, you know, kicked around until they're not, basically.
But I do think about, we just had on Cat Barton, who is the bureau chief for Bloomberg News in Seoul, South Korea. And she talked about how Jensen has looked as a star, and that, you know, Samsung and SK Hynix, so crucial to the chip story, global chip story, and how, you know, Jensen met with them, like had relationships with them. And that's so important, especially to any kind of Asian, you know, company. And so you have to wonder kind of what happens next. Can there be somebody? Is it a renaissance, or how do you think about who needs to be the next leader of Nvidia?
I mean, that's a very good practical point. If his relationships with TSMC, for example, and we certainly know that he was a friend or a confidant of Morris Chang over there, if the relationship with TSMC went through him, if the relationship with Samsung, with SK went through him, and I've been in a room with the leaders of those companies and Jensen and seen him interact with them. So it's absolutely clear that there was a relationship and he was certainly the front man. And how quickly new relationships can be forged or need to be forged is going to be probably one of the top priorities of whoever they bring in to replace him, or for Colette Kress, the CFO, and her team of people who are basically picking up the pieces right now. It's in everybody's interest, because Nvidia is still looking, they still have the best products, to stay working with them for the time being. But they have to keep proving it. They have to keep earning it.
Mhm. And there's no salesman there for them right now. So, Ian, before we let you go, there's still only one sell rating on Nvidia by analysts who are tracked by Bloomberg. What is the bull case that analysts have come out with in recent days that still exists for Nvidia?
Yeah. And that's what we just mentioned, right? Jensen did not design their chips, right? Jensen did not invent CUDA, the operating system that based it all. Jensen is not the person who built the data centers. Jensen is not the person who designed the racks of servers. He was a front man for all of the rollouts and everything like that. But there absolutely must be a group of engineers who are more than competent inside this company, because, you know, the engineers at Google, at Microsoft, they're not idiots, right? They wouldn't be buying Nvidia products unless Nvidia products were the best, right? This isn't a default status right now, and probably for some time to come, Nvidia will have the best products out there. How these engineers react to the challenge that they're facing and how they go forward will determine them.
Stay with us. More from Bloomberg Businessweek Daily coming up after this.
Well, a Chinese company founded by Alice Wong, the woman at the center of a controversy dogging Nvidia, procured smuggled AI chips that were installed at a Shanghai data center with links to Mega Speed International. That's according to documents reviewed by Bloomberg News. The relationship that Nvidia's now former CEO, Jensen Huang, had with Alice Wong led to his resignation from the company he co-founded. We're curious, though, about how all this is playing out overseas.
Yeah, especially as we've seen in terms of global equity funds, they are attracting record inflows. So it's interesting. Investor money has been moving increasingly more around the world, not just the United States. Here with a global view of the Nvidia story and more is Cat Barton. She is normally in Seoul. She's Bloomberg News Seoul bureau chief. She's been in the Asia-Pacific for 25 years. Cat, we're delighted we can get some time with you. Our time frames don't always, the time differences. How is the Nvidia story playing around the world?
Well, in South Korea they loved Jensen Huang, like they were such big fans. Because you remember, he came to South Korea and he had this big AI summit where he sat down, he drank beer, he ate fried chicken with Jamie Lee from Samsung and, um, Tak Hyoung from SK Hynix. They are huge, obviously customers or suppliers, and Nvidia is their biggest customer. So in South Korea, Jensen had like this rockstar welcome. People were queuing outside the restaurant to catch a glimpse of him. So the last few days since this story broke, the local media coverage has been really disappointed. I mean, people are like, oh, we feel personally let down.
Do they feel like he should have stayed at the company?
I think, I think that is, no, they don't feel that. But I think they feel like a sense of kind of personal betrayal, like, why did he do this? We loved him, you know. And I think the concern now, obviously, is what's the impact on Samsung? What's the impact on SK Hynix? And I think for now, we've had the minister of ICT, he's come out and said everything's locked in, like no sudden movements, it's all going to be fine. But at the same time as it is, he's information and communication technology. It's like that guy who's in charge of the semiconductors.
He's also a deputy prime minister. And he was saying like, yes, don't worry. It's, you know, the agreements are secure. We're not expecting any big changes. But obviously it now depends on who the next, you know, Nvidia leader is.
I mean, what's going to happen? What's going to change? So to what extent is the relationship that Jensen had with the leaders of SK Hynix, the leaders of Samsung, and the leaders of other companies in the region? To what extent does the next CEO have to continue those relationships? Because we talk a lot about this fact that he was the ambassador to an entire technology and an entire industry. And it's really hard to imagine just anyone filling that part of his shoes.
