Nvidia's Ceo Jensen Huang Resigns After Second Affair Allegations | Bbc News

Samira is still with us, watching from New York. Samira, what are the expectations now? Firstly, let's just address what could happen as U.S. markets open. Well, look, I'm looking right now at the live update in terms of where the share price is, and it is down some 13%. Now, remember that markets have only just, just opened, and so we're going to be seeing a lot more movement happening when it comes to the share price for NVIDIA. It is, we cannot underscore enough just how big of a move this is that Jensen Wang has resigned from his position as the CEO of NVIDIA. Now, remember, NVIDIA in so many ways is a big reason why America is seeing this economic boom when it comes to AI. They are making 90% of the chips that are being used in the massive... AI build out. And so, Lucy, this is really a pretty big news day when it comes to what's happening in terms of the business world, but also the impact it has elsewhere around the US economy. And just to emphasize, Samira, that a few weeks ago, this scenario would have been impossible for people to even imagine that Jensen Huang wouldn't be in charge of This company that he has been involved with that is so influential after Apple, one of the biggest companies in the world. I mean, the sense of shock over the past week or so about these revelations is profound. Absolutely. Look, Jensen Wang is so much a part of NVIDIA and NVIDIA and the success of NVIDIA is really due to a lot of Jensen Wang. I mean, he has so much popularity in Silicon Valley, people walking around with Jensenity shirts, just showing just how much people attribute the success of the company to himself. But also when you look at the leadership within the company, Jensen is very much someone who is involved. He's very involved in everyday decisions and he is very involved with all of his deputies as well and so it's hard to see the company without him at the helm but that's certainly something that the company is going to try to do now as they try to bring some kind of stability to the company. And what do we know about Colette Kress-Samara, the new interim boss of NVIDIA now? Very experienced, not an engineer, though, and probably has her own ideas about where she possibly wants to take the company. For sure, a very different leadership style, we can imagine. Certainly, it's going to be very different leadership style. I think one of the questions, of course, is, is she going to only be an interim chief or will they eventually, will the board eventually appoint her as the permanent CEO? Right now, her biggest job is to try and reassure both employees. Clients and, of course, investors that, look, regardless of what has happened with their CEO and his ouster, that the company and the fundamentals remain. That's what's really most important right now. And so I think this is why we brought in this new individual. Now, she's not new to the company. Remember that she is the chief financial officer. And when you're the board of directors of NVIDIA, you're thinking, well, who can we put in place? And it almost seems as if there was no one. No one else really at the company that would have been in a position to be able to take on that role. Let's bring in Chris Vallance, who joins us now. Chris, we haven't really talked yet about wider reaction. I mean, NVIDIA's rivals are going to be really enjoying this news, but what kind of reaction have we been getting to this? Well, I mean, I think the first reaction was from the markets. I mean, you have to think that after 30 years of leadership, Under a figure who has really created the kind of business that he built and built a four and a half trillion dollar business, the fact that he's left. Whatever his successor's skills, that introduces uncertainty, and I think you're seeing that uncertainty reflected in what's happening in the markets. I mean, there is an open offer from Elon Musk to Jensen to join him in his AI endeavors. That would be an interesting prospect. I wouldn't stake my pension on it actually happening. But it is a... This is going to send shockwaves through the industry because NVIDIA is central to the ambitions of all these giant AI companies who rely very heavily on the chips that it sells, that it produces, that really Jensen has been instrumental in using as the basis of a multi-trillion dollar business. And Chris, I'm just looking myself at some of the reaction that we've been getting in from people talking about what he means to the company, and that really can't be overstated. But what do you know about Colette Kress and whether she will be able to reassure investors and others that she's up to the job, even if she's just there as an interim leader? Well, I think the, you know, there was no clear succession for Jensen Huang. Her name had been mentioned, chief financial officer, somebody whose appointment would presumably reassure investors because it's somebody with, you know, primarily a business rather than a technical focus. If you look at NVIDIA's senior leadership. There was a lot of strength there, and people who had been involved in the company since the very early days. You had the two other co-founders alongside Jensen Wang. You had people like Ian Buck and Brian Catanzaro, who are on the technical side and have been the key players in developing that sort of technical edge that NVIDIA has, particularly Ian Buck, who really developed the kind of... tools that enabled them to build these chips that are so coveted by the AI firms. So a range of potential candidates. What I think we've got now in Coletta is somebody who is there to reassure people, to calm things down, and really to put the company back into a sort of stable position after the exit of a charismatic and brilliant leader. I mean, I think the Economist in their op-ed a calling for Jensen to leave sort of summed it up. you He's a brilliant man and a fool. He's been failed by his own personal life, His his personal life, if you like, rather than a failure to continue inventing the future. much. And he himself saw his future as potentially lasting And of course, an interesting bit of context for all of this is that he has family members working at the company, his own children. Indeed, his daughter, Madison, was seen as a potential successor. He was asked about that in a recent Bloomberg interview, and he said, well, well, she'll have to earn it. There was no sort of free passage to the to the top levels of the company just because of who she was. Chris, thanks for that. And Samira, just remind us again. Why this matters to lots of people who probably don't even realise they own tech stocks or that it might be part of their pensions. Right. So if you're involved in any way with the with financial markets, if you hold mutual funds, if you have a pension, then you are, in fact, an Nvidia investor that those funds hold some of Nvidia stock. And so this actually does matter in some ways to a lot of people because of. everyone's involvement in the company financially. Lucy, this also raises a lot of questions about artificial intelligence investment, supply chains, and whether a major leadership change could actually trigger fresh volatility across the entire sector. Now, I want to get more on this, and I'm joined by Eldar Tuve, CEO of software management platform Vatis. Now, listen, Listen, you are a client of NVIDIA. As a client, as someone who buys their product, what impact is this having on you? So, so, Vatis is an AI procurement platform. Most of the customers that we support around the world have some sort of spend with NVIDIA. In fact, one of our customers is a frontier lab. So, in that case, they're spending billions with NVIDIA. All of our own AI that we build runs on frontier models, so indirectly I think we're impacted, but virtually every company that uses AI has in some way some sort of indirect spend to NVIDIA. There's some uncertainty, obviously, today with the news. I saw recently in the pre-market the stock was down, whatever it is, 13.5%. I think on the back of the sort of volatility that we saw two weeks ago or a week ago in the markets in the U.S. and the upcoming Anthropic IPO, which I think is due to be priced before Thanksgiving, It just adds to this climate of uncertainty. There's a lot of turbulence. But, you know, if we step back, the genie's out of the bottle, if you like. There's a sort of major AI super cycle that we're in just the beginning of. I don't think it's going to impact adversely our customers in terms of their spend with NVIDIA. But obviously, they'll be watching this space very, very, very closely. I do want to ask just how integral is Jensen Huang to NVIDIA? Well, I think, you know, he's been an inspirational leader. I think he was a major player in this sort of the... The blossoming of the AI space, we're all involved in it now. I think whether you know it or not, some part of the technology that you use today is running on AI, is delivered via AI, is coded via AI. My own children use AI all the time. So we're all impacted by it and all of it, nearly all of it, runs on NVIDIA chips. So I think it will necessarily impact all of us, but I have full confidence in NVIDIA to be able to move forward from here. He's obviously been really, really important to the story, but I don't think anything really stops it now. Eldar Tuve, thank you so much for all of your insights. Really fascinating to hear from someone who is directly involved with some of that business. Now, I do want to turn now to our next guest, Sean Clark. He's the investment officer at Clark Capital Management Group. First off, I need to get your reaction about NVIDIA, its share price, and, of course, the news about Jensen Wang leaving his position. Yeah, I guess that's been building up for a little while now. So the departure is not a surprise, given the fact that the news broke several days ago. I agree with your previous guest about the long-term impact. And when we look at this, the stock opened down about $150, down from $239, which was NVIDIA's all-time high in early October. That represents about a 35% haircut on the company share price. This whole event with Jensen ousted, it does raise a lot of questions, and it does raise a lot of uncertainty with NVIDIA in particular. From an innovation standpoint, an organizational standpoint, he was certainly a visionary. So there's going to be a lot of questions about where NVIDIA goes now. What happens next? My sense is, however, that given the juggernaut that NVIDIA is and its position in the AI space, I think the whole space is bigger than Jensen Huang and bigger than just NVIDIA. So we look at this as a short-term clearing event in what arguably is already a correction. We've been in a correction in technology, in AI, in AI adjacent sectors. Since really early this summer, this could prove to be a clearing event that sets a low for the market to really recover into year end and beyond, which is actually our expectation as we move into calendar year 2027. Well, so you bring in the markets and I do want to ask about that just more generally that, you know, all of this drama is unfolding at a time in which we're already seeing wobbles when it comes to the AI sector. You call it a correction, but I'm wondering if this could inject more uncertainty, especially at a time in which we saw the Democrat sweep and the threat of potentially more regulations and more investigations into AI companies. You know, let's talk about the broader market, right? And you brought up the midterm elections and the Democratic sweep there. Historically speaking, midterm election years are volatile affairs. The markets usually have some sort of a correction into or just beyond the midterm elections, which we did this time as well. Historically speaking, the market responds very favorably after those elections, after investors get kind of comfortable with what the eventual outcome of that midterm election is. We know what the outcome is now. And I just like to look at history. I'm a student of market history. And in 19 of the past 19 midterm elections, from the end of October through the next six months, in each one of those cases, the market was higher. So 100% of the time, the market has been higher in 19 of those prior examples by an average of 15% on the S&P 500. Now, looking out further, we know that what Wall Street adage is, markets love gridlock. So we're going to have gridlock, which means maybe not a whole lot of new policy is going to be coming out of Washington, because as you said, there's going to be investigations, there's going to be political turmoil. The market historically performs decently and better in those environments. Absolutely fascinating stuff. Sean Clark, I cannot thank you enough for your insights today on what is a very busy morning.