The downfall of Jensen Huang

{"text":[[{"start":8.26,"text":"On Tuesday, facing a mounting scandal about his affair with a suspected Chinese spy, Jensen Huang surprised his staff by summoning them to a planning session for his annual keynote presentation in Washington."}],[{"start":21.82,"text":"“It’s gonna be great . . . it’s going to be the best one ever,” the Nvidia chief executive told his team, according to multiple people familiar with the meeting."}],[{"start":29.3,"text":"It was a characteristically ebullient effort to project an air of “business as usual” for a chief executive battling to save himself, his family and what was until recently the world’s most valuable company. One colleague described the experience as “surreal”."}],[{"start":43.74,"text":"But in private, facing the loss of his job and an ignominious exit from the company he co-founded 33 years ago, Huang had become a morose figure. He openly mused to colleagues that his relationship with his wife could now be more important than staying on as CEO, some of the people said."}],[{"start":null,"text":"

"}],[{"start":61.3,"text":"The next day Huang was out. He resigned after a hurriedly convened board meeting that went late into the evening in Santa Clara, following reports of a second affair, this time with a subordinate. Allegations of another relationship with an employee followed soon after."}],[{"start":77.1,"text":"Huang’s exit capped two weeks of chaos that led to the downfall of one of the world’s richest and most powerful people, who had grown Nvidia from a graphics chip specialist known mainly by hobbyists and gamers into a $5.8tn behemoth at its peak last month."}],[{"start":94.06,"text":"Rumours and news reports had swirled for months around Nvidia’s dealings with customers in south-east Asia with ties to China. These included Megaspeed, a Singapore-based company with financing from China’s Alibaba, being investigated over potential AI chip smuggling."}],[{"start":110.18,"text":"Exports of the company’s world-leading AI chips to Chinese buyers are tightly controlled. Huang has pushed for those rules to be relaxed, arguing that controls were counter-productive and lobbying to be able to restart sales in the huge Chinese market."}],[{"start":124.02,"text":"Chris Miller, professor at Tufts University, said Huang angered a lot of people in Washington with his position on China. And Miller said Nvidia appears to have operated under “the belief that selling to a company that was primarily providing compute to Alibaba wasn’t a problem”."}],[{"start":139.94,"text":"It set the company up for a scandal that has now plunged the chipmaker at the centre of the AI boom into crisis, reverberating through global markets as investors struggled to gauge the level of impact on Huang’s web of investments and circular financing deals that some estimate could top a trillion dollars."}],[{"start":157.74,"text":"The fallout has reached commerce secretary Howard Lutnick, as lawmakers on Wednesday demanded answers as to how his department allowed Nvidia’s chip sales to a company linked to an alleged Chinese spy."}],[{"start":169.5,"text":"The White House and commerce department did not respond to requests for comment on Wednesday."}],[{"start":null,"text":""}],[{"start":174.22,"text":"The abrupt change in Nvidia’s leadership, and an investigation by the board and outside lawyers, are also pulling back the veil on internal politics and corporate governance. One source said the 63-year-old Huang ran Nvidia as a “feudal system” with its own messy dynastic politics."}],[{"start":191.14,"text":"Huang has appointed his daughter Madison Huang, who first joined as an intern around six years ago, and her husband Nico Caprez to positions of power. His son Spencer also has an executive role."}],[{"start":202.94,"text":"Multiple current and former colleagues described Huang’s daughter as difficult to work with, ruffling feathers by operating as her father’s de facto chief of staff, despite her official role as a senior director of marketing."}],[{"start":215.1,"text":"Nvidia declined to comment. Jensen Huang and representatives for his family did not respond to a request for comment."}],[{"start":222.84,"text":"People close to Nvidia said the founder’s imperial control over the company was difficult to challenge."}],[{"start":227.74,"text":"“I can’t tell you what a cult this place is,” said a person who has worked with Nvidia, describing how general counsel Tim Teter wears a leather jacket similar to Huang’s signature look."}],[{"start":238.34,"text":"“Jensen is a god, and that’s how he’s worshipped,” the person added."}],[{"start":242.26,"text":"Teter, who acts as Nvidia’s de facto chief compliance officer — the company lacks someone officially assigned to the role — has been tasked with ensuring it does not fall foul of the myriad export control rules that AI chip companies face."}],[{"start":256.28,"text":"Another longtime Huang lieutenant, chief financial officer Colette Kress, has now been thrust abruptly into the role of interim chief executive. Company insiders say she is focused on stabilising the company as the board scrambles to find a new leader — having failed to draw up a formal succession plan in advance."}],[{"start":274.34,"text":"“Jensen was the supreme deity of Nvidia,” said one investor in the company. “I have no idea who the next most capable person is at the company. If they go for an outsider, that creates a rift.”"}],[{"start":null,"text":""}],[{"start":286.62,"text":"The crisis that cost Nvidia its leader centred around his links to Alice Huang, an executive at MegaSpeed, the Singapore-based client. The New York Times reported late last month that US spy agencies were surveilling Alice Huang, whom they suspected of being a Chinese spy, winning the Nvidia CEO’s confidence and passing intel to Beijing."}],[{"start":307.54,"text":"Nvidia initially dismissed the allegations, saying: “Jensen’s interactions with Ms Huang are not unusual or unexpected.”"}],[{"start":314.62,"text":"The following week, the FT reported that US intelligence agencies believed Huang had a romantic relationship with the suspected spy and had warned top government officials before President Donald Trump flew to Beijing for a summit with Xi Jinping. Huang joined the trip at the last minute, racing to Alaska to board Air Force One at a refuelling stop."}],[{"start":334.72,"text":"Two days after the FT’s report, Huang acknowledged he had been “unfaithful to my wife”. His admission raised questions about whether he or anyone else at the company had previously lied to the board — and forced the directors to launch an independent probe."}],[{"start":null,"text":""}],[{"start":348.78,"text":"Still, the company hoped to save its chief executive, according to multiple people familiar with their discussions."}],[{"start":355.54,"text":"Directors discussed how they could save the situation if it was proved Huang did not know his paramour was a spy, clearing him of divulging secrets. A promise to improve corporate governance by appointing an independent chair and creating a formal succession plan would mollify investors, they hoped."}],[{"start":371.58,"text":"But the scandal snowballed, with reports that Nvidia’s top lawyer Teter had attempted to intervene in a commerce department inquiry into MegaSpeed. In response to the report, Nvidia said it regularly consults officials, including to provide information and request guidance — and that it works with the government to block smuggling."}],[{"start":389.98,"text":"Trump backed Huang, but disclosed the FBI was investigating. And the Nvidia boss was summoned to testify by furious members of Congress."}],[{"start":398.14,"text":"What proved terminal were reports that Huang had another alleged affair, this one with Kimberly Powell, the chipmaker’s vice-president of healthcare. Nvidia announced his resignation on Thursday morning."}],[{"start":411.98,"text":"Huang’s supporters in Silicon Valley rallied to defend him on social media."}],[{"start":416.78,"text":"Elon Musk said it would be “an honor” to hire him at SpaceX. Martin Casado, a partner at venture capital firm Andreessen Horowitz, posted that it was a “Dark, dark day. Horrible decision for the US and the western world.”"}],[{"start":null,"text":""}],[{"start":432.06,"text":"Inside Nvidia, despite the chaos and value wiped from their stock, some staff see this as a chance to reset the chipmaker’s culture and introduce governance structures better suited to a company of its size."}],[{"start":444.6,"text":"“The level of hubris, sense of invincibility and untouchable vibes shared by Jensen, his family and some executives” had made working at the company “intolerable”, said one employee."}],[{"start":455.58,"text":"Huang operated with 60 direct reports, giving him enormous influence over every decision made within the company, while leaving no single person capable of challenging him."}],[{"start":465.86,"text":"“Jensen’s been CEO for 30 years. There were many people that came up with him and got wealthy and so were very loyal. But then they all started to retire,” the person added."}],[{"start":475.3,"text":"“Now this has all come out — and there’s more to come — it reminds me of [the nursery rhyme]: ‘All the king’s horses and all the king’s men couldn’t put Humpty together again’.”"}],[{"start":485.02,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794579573_3874.mp3"}