Newshot The resignation of Jensen Huang as chief executive office of AI computing giant Nvidia has thrown into question the leadership of the company and shone the spotlight on complications that can arise when the operation of a titanic enterprise revolves around a sole individual.
Huang resigned Thursday after reports of a second extramarital affair, leaving one of the world’s most valuable companies without a clear successor and at the center of a U.S. government investigation into possible breaches of national security.
One of the faces of the AI boom and co-founder of the American-based chipmaker, Huang admitted to having an affair with Alice Huang, a former executive at Singapore-based Nvidia customer Megaspeed International. U.S. intelligence agencies have reported that Alice Huang, who is not related to Jensen Huang, is a Chinese government agent.
On Wednesday, The New York Times reported that Jensen Huang had a second affair with Kimberly Powell, Nvidia’s vice president of health care, who reported to him. And on Thursday, just hours after his resignation, Reuters reported that Huang allegedly had a third affair with another Nvidia employee, who the news outlet did not name.
Ryan Ellis, an associate professor at Northeastern University whose research focuses on communication law and policy, infrastructure politics and cybersecurity, said Jensen Huang’s departure represents a significant challenge for Nvidia as it scrambles to find a permanent replacement.
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Nvidia seeks successor after Jensen Huang’s exit wobbles AI industry
The company, which is valued at more than $4 trillion, said in a statement on Thursday that it does not have a prearranged plan for Huang’s succession, but that the board will consider candidates both from inside and outside Nvidia. As a holdover measure, the company named Colette Kress, executive vice president and chief financial officer, as the interim CEO and appointed entrepreneur Harvey C. Jones as its first-ever chairman.
In an interview with Northeastern Global News, Ellis described the unique complications facing Nvidia as it seeks to fill Huang’s shoes. The interview has been edited for length and clarity.
What happens to Nvidia’s corporate structure now?
In terms of successor and the corporate structure, Nvidia had a fairly flat structure that gave the chief executive enormous power. They didn’t have a succession plan.
Whoever steps in and runs the company long-term will have to go a long way in determining what the future of the company looks like. It might not happen overnight, but I think this would be a time to rethink how the organization is structured.
The other question will be – will there be a time when Nvidia wants to bring him back? Seems unlikely today, but things have a strange way of shaking out.
What are the complications of replacing someone as public-facing as Jensen Huang?
His exit is a reminder that having a publicly-traded company identified with a single individual so strongly is actually quite a risky gambit. Individuals fail. Individuals make mistakes. Individuals can be compromised. We’re seeing that play out in dramatic, catastrophic fashion today with Nvidia.
Moving forward, I think that Nvidia is probably going to do everything in their power to try to assure the public that things are going to return to some sort of normal, and that they’re in safe hands. Whether or not they convince the public and the investor community of that is an open question.
Apple is a useful example. They famously were able to succeed and continue to succeed once Steve Jobs left and Tim Cook took over. And so, it’s not impossible for a company – even a company that’s so tightly bound up and tied together with a single individual – to succeed once that individual leaves the scene.
What lessons might other “too-big-to-fail” companies with leaders facing scrutiny – such as Tesla’s Elon Musk – take away from this resignation?
Having so much of your company’s success bound up in any single individual – even if they are a genius, even if they’re the most upright citizen in the world – is an enormous risk.
Other large companies generally take steps to publicly disclose and plan for succession; identify key figures who might be able to step in if there are circumstances that require replacement; and identify the nature of the risk and other opportunities to mitigate it.
Over the past few days, what we’ve seen is that risk coming to fruition. The lesson for other companies would be to take seriously the challenge of relying on any one single key figure. To plan for it, to acknowledge it, and to think about ways to mitigate it.
Do you believe Nvidia will look internally or externally for a replacement?
If the investigations turn up information that indicates there are larger problems inside the company in terms of governance, that’ll probably go a long way to deciding if they want to look internally or externally.
This additional revelation of an affair with a direct-report employee indicates there are larger issues going on at the company that would suggest they’re going to want to look externally for a new leader.
If, however, they conclude that the challenges were confined to a single individual – which, frankly, seems unlikely, but possible – then that would make them perhaps more likely to look for an internal candidate to step in. Nvidia has a number of employees and folks on the board who have been there for an extremely long time.
How might Jensen Huang’s departure shake up the AI industry in this delicate time, with the portent of tougher regulations after the U.S. midterms?
A number of these players on the hardware and model-development side are closely entwined. They’re sharing resources, they’re leveraged and invested in one another, such that it would appear that any significant failure by any one of these particular pillars of the industry would have a real ripple effect.
Today, one of those pillars has started to wobble. Nvidia isn’t just a technological driver. They are financing a lot of the build-out of data centers, and today they look a lot less healthy than they did yesterday.
Right now, the global economy and certainly the U.S. domestic economy has rolled the dice significantly and made a bet that the development and advancements of AI are going to continue. If that bet turns out to be a bad bet, we are all in a lot of trouble.