Jensen Huang quits Nvidia after 33 years, and the finance chief takes over the world’s AI engine

The man who turned a graphics-card maker into the company at the centre of the artificial intelligence boom is gone.

Nvidia announced on Thursday, US time, that Jensen Huang had resigned as president, chief executive and a member of the board, effective immediately. Chief financial officer Colette Kress has agreed to serve as interim chief executive, keeping her finance role until a permanent successor is named. The board said it would consider internal and external candidates.

The announcement did not say why Huang had gone. It thanked him, saying his contributions to Nvidia “are profound”. An Nvidia spokesperson said Huang would not work with the company in any capacity from now on.

Who is running Nvidia now?

Kress has been Nvidia’s finance chief since September 2013 and is the executive investors know best after Huang. “Our focus remains on serving our customers, partners, developers and shareholders,” she said.

The board has also appointed its first-ever chair. Harvey Jones, the former chief executive and executive chairman of chip-design software company Synopsys, has been a director since 1993. Until now the board had no chair, and Nvidia had set out no public succession plan for its founder. “The Board has full confidence in Colette and the leadership team,” Jones said.

How did it come to this?

In the space of five days, Huang went from a board that said it had confidence in him to the exit.

On Sunday he told staff he had been unfaithful to his wife and was deeply sorry. That followed reports in the United States that American intelligence officials believe the woman involved, a businesswoman linked to a Singapore company under US investigation over alleged chip smuggling, was an asset of Chinese intelligence. No US agency has confirmed that publicly, and China called the claims unsubstantiated. The board opened an independent investigation, saying it had no reason to believe national security or Nvidia secrets had been compromised.

On Wednesday a new report said Huang had also had a relationship with a senior Nvidia executive who reported to him. Neither has commented publicly on that report. The board met late that day on his future, and the resignation followed on Thursday.

What has it cost shareholders?

Nvidia’s shares fell as much as 16% after the announcement before recovering much of the loss to close lower on Thursday. Over the week to Thursday’s close they were down about 11%, a fall of roughly US$500 billion in market value. Huang still owns about 3.6% of the company.

The fallout reached Australia on Friday. The ASX 200 closed 0.7% lower at 9,082, with technology shares among the weaker sectors.

Why it matters in Australia

Nvidia is one of the world’s two largest listed companies, and its chips power the data centres that Australian businesses, universities and governments are racing to build. Many Australians hold Nvidia through the international shares in their super, and its swings move technology stocks worldwide.

What happens next

Nvidia reports its third-quarter results on Tuesday 17 November at about 1.20pm Pacific time, which is about 5.20am on Wednesday in Perth and 8.20am in Sydney. It will be Kress’s first results call as interim chief executive, and investors will be listening for whether the leadership change touches orders from its biggest customers.

The board’s independent investigation, the FBI inquiry mentioned by President Donald Trump and a shareholder class action filed in San Jose all continue.

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