Updated ,first published
In January, I sat in a room at CES in Las Vegas while Jensen Huang held court for nearly two hours. He wore a crocodile-pattern Tom Ford leather jacket, spoke without notes and moved easily between China export controls and the future of gaming. He had the energy of a man half his age, and he was deeply impressive.
I had one question, and chose to ask him how much longer he planned to run Nvidia. The secret to lasting 33 years was simple, he told me: “Don’t get fired, and don’t get bored.” He would stay “for as long as I deserve this”, he said. “We are the captain of this industry.”
He has never been in danger of getting bored. But getting fired is another matter. Nvidia’s board is preparing to push him out, The Wall Street Journal reported.
What tipped it over was an alleged second relationship. The New York Times, citing five people who have worked at Nvidia, reported that Huang had an affair with Kimberly Powell, a senior executive who reports to him. Two of those people said the pair were filmed being affectionate at a San Jose hotel in March. Three said Huang’s security team approached the person who filmed it and offered them a non-disclosure agreement.
When the Times called Huang to ask about Powell, he said, “I don’t think you should be talking to me directly,” and hung up. Nvidia declined to comment and Powell did not respond.
It caps a disastrous week for Nvidia. On Monday, Huang told staff he’d had an affair with Alice Huang (no relation), an executive at one of Nvidia’s customers who US intelligence reportedly believes was working for China. China denies it. Nvidia’s board has hired a top law firm to investigate, and it says it has no reason to believe any secrets were compromised.
Nvidia’s shares fell about 8 per cent in trading after the US market closed, as news of the board’s plans broke.
It’s worth remembering how unlikely Huang’s story is. Born in Taiwan in 1963, he was sent to the US at nine and, through a mix-up, ended up at a reform school in rural Kentucky, where he cleaned toilets and taught his roommate to read. He later studied engineering in Oregon and worked night shifts at a Denny’s diner for $US2.65 an hour.
In 1993, aged 30, he and two others started Nvidia in a Denny’s booth in San Jose. Three decades on, the former dishwasher was running the world’s most valuable company, selling the chips that power almost every AI tool you’ve heard of.
I’ll be honest, I left that room in Las Vegas thinking Huang was one of the most exceptional executives I’d met – few leaders can freely answer journalists’ questions for hours as ably as he did – and nothing reported this week changes what he built. But it does show what happens when a company this important depends on one person.
That’s why this is an important story for Australia even if you’ve never thought about a computer chip. When I wrote about Huang in January, Nvidia comprised about 8 per cent of the S&P 500, the main index of big US companies. If your super has money in overseas shares, you almost certainly own a small piece of it. AustralianSuper, the country’s biggest fund, holds about $3 billion of Nvidia shares, according to its latest filings.
“Nvidia without Huang was unthinkable a fortnight ago,” says Josh Gilbert, an analyst at trading platform eToro. Now investors have to put a price on that risk.
Wall Street tech bull Dan Ives has had a crack. In a note to clients, his firm Yorkville Ives valued Nvidia at $US300 a share with Huang as chief executive, and $US225 a share without him.
“In our view the writing is on the wall that Jensen’s days at Nvidia could be numbered,” Ives wrote. He still expects Nvidia’s chips to stay at the centre of the AI boom, but says Huang “is not replaceable by another CEO or group of interim executives”.
The deeper problem is that there’s no obvious plan B.
Nvidia’s 10 directors have served on its board for a combined 161 years, and several have known Huang since the 1990s. The board has no chair and the company has never named a successor. That’s what prompted me to ask Huang about his future in January: even then, the issue of ‘key man risk’ was on investors’ minds.
If the board moves against Huang, it needs to name a temporary replacement and an independent chair quickly to keep the share price from plummeting further. It has little time: Nvidia reports its quarterly results next week.
Then there’s Washington. The revelation that Huang had an affair with a suspected Chinese spy has made it much more likely that Congress will pass new limits on chip sales to China before Democrats take control of both houses in January, Politico reports. The leading proposal would force advanced chips to carry tracking technology, so authorities can tell if they are being smuggled into China.
Nvidia and other chipmakers say that would push up costs. Brian Mast, a senior Republican congressman, says the scandal has “100 per cent” weakened Huang’s ability to fight the changes.
In Australia, data centre companies are racing to fill their buildings with Nvidia chips, and anything that makes them dearer or harder to get flows through to the AI services Australians use.
Put simply, the bedroom behaviour of one man is upending Australia – and the world’s – entire AI sector.
Huang told me the trick to 33 years in charge was not getting fired.
It seems that’s no longer up to him.
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David Swan is the technology editor for The Age and The Sydney Morning Herald. He was previously technology editor for The Australian newspaper.Connect via X or email.
