Nov 12 (Reuters) – Nvidia CEO Jensen Huang is stepping down, leaving the AI industry without an outspoken cheerleader and clouding the future of the chipmaker he built into an AI powerhouse.
Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, the company said on Thursday. Huang, who co-founded Nvidia and is its fourth-largest investor with a stake of about 3.61%, will not remain on the board.
Here are some reactions to the news:
DAN SHEEHAN, DIRECTOR OF PORTFOLIO MANAGEMENT AT TELOS WEALTH ADVISORS, CHARLOTTE, NC:
“His (Jensen Huang’s) departure will also raise further questions about the circular financing within the AI industry and potentially create opportunities for competitors such as AMD, Broadcom and Marvell as customers consider diversifying their suppliers.
Nvidia has lost the man who helped create the AI revolution, but it hasn’t lost the technology driving it. The next CEO inherits an extraordinary business, but also one of the hardest acts to follow in corporate history.”
SUSANNAH STREETER, CHIEF INVESTMENT STRATEGIST, WEALTH CLUB, BRISTOL, ENGLAND
“Even Jensen Huang’s superstar status could not eclipse the impact of the scandal on Nvidia’s reputation.
Colette Kress is going to be an interim CEO. I think she’ll be seen as a safe pair of hands. I think she’s been at the company for around 13 years and has currently been brought into steady leadership, but she lacks global status.
She’s unlikely to be able to forge such deep commercial ties, and Nvidia will now enter this period of uncertainty over strategic priorities, pricing, and supply agreements.”
MICHAEL LANDSBERG, CHIEF INVESTMENT OFFICER, LANDSBERG BENNETT PRIVATE WEALTH MANAGEMENT, FLORIDA
“Jensen Huang’s resignation is the worst-case scenario during this entire saga, as he was not just a leader, but a visionary for the company, and while CFO Colette Kress is highly capable and respected, there are still big questions about how the innovation of Nvidia will evolve without Jensen.
The stock is now pricing in a leadership discount, as the Jensen premium evaporates. While it’s possible for Nvidia to navigate this storm, it’s likely going to take time and we would expect the stock to remain under pressure for some time.”
KATHLEEN BROOKS, RESEARCH DIRECTOR, XTB, LONDON
“The biggest thing about it is that it leaves the company really rudderless. No one really knows what to expect from any successor.
It does throw the AI trade into a bit more confusion. You don’t have someone who was a cheerleader for AI in the same way that Jensen Huang has. You don’t have those links into government, like Jensen Huang has huge links into governments all over the world. He was a central banker to AI, or Nvidia was, and that’s probably gone now as well.”
ART HOGAN, CHIEF MARKET STRATEGIST, B RILEY WEALTH, NEW YORK:
“Jensen Huang did the right thing in stepping down as CEO. As the story continued to get more complicated, the fact that CFO Colette Kress has been named interim CEO is also good news, because there were a lot of questions surrounding who would take over in the near term, and now we have answers to that.
And I think how this story unfolds from here, in terms of who knew what was going on, will take weeks to play out. But I sort of think that, at this juncture, based on what we do know, the company has likely priced in some of the worst-case scenarios.”
CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, NORTHLIGHT ASSET MANAGEMENT, NORTH CAROLINA
“You could see volatility as Nvidia sells off, and some competitors may trade higher because other companies may gain market share. Overall, though, this shouldn’t necessarily change the trajectory of where we were headed.”
“Companies relying on Nvidia’s technology, chips, and manufacturing capability should be unaffected. Nvidia will keep producing at the same level, and other companies will still be able to rely on them… The one thing that might change over the next few years is Nvidia’s financing strategy. The new CEO may take a different approach to the overall ecosystem, which could change how Nvidia finances its customers or suppliers. That remains to be seen.”
LINDSEY STEWART, DIRECTOR OF INSTITUTIONAL INVESTOR CONTENT, MORNINGSTAR, LONDON:
“The sudden departure of one of the world’s most influential CEOs illustrates just how quickly an unconventional governance structure can become a source of risk, and often real losses, for investors.
While Nvidia’s share price rocketed over the last few years, very few people were asking deep questions about CEO succession planning, board composition and challenge, or oversight of geopolitically sensitive aspects of company strategy. Now, all those issues will be front and center, perhaps not just for Nvidia, but also for other founder-led companies like Anthropic, Meta Platforms and SpaceX.”
JOE SALUZZI, PARTNER, CO-HEAD OF EQUITY TRADING AT THEMIS TRADING IN CHATHAM, NEW JERSEY
“Nvidia has been called the ‘Bank of AI.’ They’ll sell you the chips and loan you the money. If they have to take a step back because of what’s going on, will that cut off funding to smaller companies that need it? That’s an open question.
I have heard from some data-center folks that they can buy chips from other companies as long as those companies can supply them. If that’s the case, the AI trade continues, companies keep building data centers, and life goes on. But if there’s a supply shortage, then you have a problem.
It could also simply slow down the AI machine. Congress and others have raised concerns about the speed of AI development and whether there are proper controls and regulations. Maybe something like this slows it down, lets everyone take a breath, and acts as a kind of regulation without a regulation.”
STEVE SOSNICK, CHIEF MARKET ANALYST, INTERACTIVE BROKERS, CONNECTICUT
“It’s very difficult to spin this as good news for Nvidia. It’s difficult for the tech trade right now because not only is Nvidia’s technology so central to the AI buildout, but if this puts a damper on their ability to generate cash flow at the same rate they always have, that becomes tricky.
The interlocking deals that Nvidia has with so much of the industry raises the question into whether that created more stability or more fragility … There’ll be investigations. The Republicans may not investigate so much, but when you have a new Democratic Congress, I’m sure there will be all sorts of investigations as to whether export controls were violated, whether this was done with the knowledge of the, Department of Commerce and what the State Department knew about this.”
DANIELA HATHORN, SENIOR MARKET ANALYST AT CAPITAL.COM, UK
“Investors are trying to figure out what it means exactly for the future of the company. They’re putting someone as an interim just to step in. It’s just a concern about what the leadership transition means for the company, whether it changes much.
There’s a key risk here because Jensen was seen as the kind of the front man of AI, not just at Nvidia, but in general. And him stepping down kind of adds a little bit of jitters to the market ahead of the earnings next week and obviously in the middle of this AI rout that we’re going through. So it’s just adds another layer of that kind of uncertainty and concern being piled onto the market.”
GIL LURIA, MANAGING DIRECTOR, DA DAVIDSON, PORTLAND
“Colette Kress is well respected by investors and should be able to guide Nvidia through this challenging period. The task is daunting, as Nvidia has been founder-led since inception and Mr. Huang concentrated much of the decision making.”
(Reporting by Utkarsh Tushar Hathi, Darshan Kumar, Ragini Mathur, Akash Sriram, Johann M Cherian, Anand Gopal, Tharuniyaa Lakshmi, Deborah Sophia and Arpan Varghese in Bengaluru, Harry Robertson in London; Editing by Anil D’Silva and Pooja Desai)
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