[BizHanKook] Nvidia co-founder Jensen Huang has stepped down immediately from his roles as president, Chief Executive Officer (CEO), and member of the Board of Directors. Colette Kress, Executive Vice President and Chief Financial Officer (CFO), will serve as interim CEO until a permanent successor is appointed. The Nvidia Board of Directors has named director Harvey C. Jones as the company's first Board Chair and has begun a search for a successor, considering both internal and external candidates. This marks Nvidia's first leadership transition since Huang founded the company 33 years ago in 1993.
"Confidence" Four Days Ago... Dismissal Discussed After Reports of Relationship with Direct Subordinate
The Nvidia Board of Directors launched an independent investigation on the 8th following reports that Huang had been a target of foreign intelligence activities. On the same day, Huang admitted to an extramarital affair in an internal memo and stated he would cooperate with the investigation. At the time, the board expressed confidence in Huang and the management team, stating there was no evidence that national security or company secrets had been compromised.
Subsequently, reports of an additional relationship with an internal executive emerged. On the 11th (local time), The New York Times, citing five individuals who have worked at Nvidia, reported that Huang had an extramarital affair with Kimberly Powell, Vice President of Healthcare, who reported directly to him. Reuters noted that it could not independently verify the reports and that neither Nvidia nor Powell responded to requests for comment. According to Reuters, the board discussed whether to dismiss Huang on the same day. When the company announced the leadership change on the 12th, it did not provide specific reasons for the resignation.
While the initial reports raised concerns about security and the handling of confidential information, the allegations of a relationship with a direct subordinate have led to questions regarding the board’s management oversight. If the reports are true, the central issues include how conflicts of interest were managed during that executive's performance reviews and compensation process, and when the board became aware of the facts. In an organizational structure where dozens of executives reported directly to Huang, how major personnel and business decision-making authority will be redistributed has also emerged as a task for the successor regime.
Kress Leads Management, Jones Leads Board... First Test is the 17th Earnings Call
Kress has overseen finance for 13 years since joining Nvidia in September 2013. Having explained quarterly results alongside Huang, she is a familiar figure to investors. New Chair Jones, who previously served as CEO and Board Chair of Synopsys, stated that the existing management team is supporting Kress and that the company expects operations, commitments to customers, and product development schedules to continue without disruption. The board has placed Kress in charge of company operations while initiating the search for a permanent CEO.
Short-term performance depends on delivering existing orders on time and releasing next-generation chips as planned. Furthermore, it is difficult for clients to replace systems built on Nvidia’s software platform, CUDA, in the short term. The key to selecting a permanent successor will be determining who can lead next-generation chip development and negotiations with major clients. Reuters mentioned Ian Buck, who has led CUDA development and the data center business, as an internal candidate.
The impact of the leadership change may first manifest in the AI infrastructure projects funded by Nvidia. Nvidia has been making equity investments in certain clients. If these clients use those funds to expand data centers, demand for Nvidia chips increases. If the new management team strengthens scrutiny on new investments, AI cloud firms that rely on external capital may adjust their expansion schedules. Kress’s investment policy is expected to be revealed through the fulfillment of existing commitments and the execution of new investments.
Indicators that the domestic semiconductor industry will watch include additional orders for High Bandwidth Memory (HBM) and certification schedules for next-generation products. If Nvidia maintains its product launch plans, the impact on existing supply schedules may be limited. However, if client data center expansions are delayed, the additional orders expected by memory manufacturers could also be pushed back. There is also interest in the follow-up schedule for the collaboration announced by Nvidia with SK Telecom and Rebellion on the 9th. This project involves connecting Rebellion's next-generation AI semiconductors to Nvidia infrastructure for use in SK Telecom data centers.
Nvidia is scheduled to release its fiscal 2027 third-quarter earnings as planned on the 17th at approximately 1:20 PM (Pacific Standard Time) and will hold a conference call at 2:00 PM. Investors will be able to confirm whether existing business plans remain intact regarding data center revenue forecasts and next-generation chip shipping schedules. The impact of the founder's departure on AI data center expansion will also be gauged by the policies Kress introduces regarding client investment and funding support.