A series of highly damaging news reports exposed multiple personal affairs and entanglements with company employees, after which Jensen Huang resigned from his position as CEO of NVIDIA. This event has undoubtedly dealt a severe blow to Jensen Huang personally; in the short term, it will also plunge NVIDIA into turmoil while swaying Washington's policy direction toward China.
This crisis has exposed NVIDIA's extremely high and completely unhedged key-person risk, and it has already caused tangible damage. NVIDIA's management structure has almost no precedent: a full 60 executives report directly to Jensen Huang. He never formulated a succession plan, and the company has not cultivated a group of management talents capable of quickly taking over the top position with public influence.
This key-person risk also radiates outward to the entire AI investment sector. Jensen Huang is almost ubiquitous: campaigning for American technological discourse power while also serving as the chief architect of the AI capital and hardware ecosystem. If NVIDIA is likened to the "central bank of AI," then Jensen Huang is the governor.
Mohamed El-Erian, Chief Economic Advisor at Allianz Group, posted on X the night before Jensen Huang's resignation: "This is not an ordinary CEO, not an ordinary company, not an ordinary industry, and not an ordinary era." He believes the negative impact of the event is difficult to confine within a single company.
But if NVIDIA can weather this storm, the matter could instead become a major positive for the company and even the entire industry. Going forward, investors and analysts will no longer view NVIDIA through the lens of an Edison-like legendary founder. Without Jensen Huang, the cult of personality around visionary founders will dissolve, and the market will only focus on financial data and business logic. If the data and logic remain solid and persuasive, the foundation of the AI sector will actually appear more stable.
Being able to perform well without a star central figure precisely proves the strength of the team. Of course, the premise is that NVIDIA can truly achieve this. Apple is a good reference: it went through Steve Jobs' departure, return, and eventual handover to Tim Cook. After Jobs' first departure, the iPhone maker briefly lost its way until his return turned things around, after which he passed the baton to Cook. Cook is steady, but ultimately not Jobs. (President Trump once suggested that NVIDIA poach the already "retired" Apple Cook.)
Jensen Huang may be a visionary who single-handedly drove the AI transformation, but after his departure, NVIDIA and the entire AI industry must continue moving forward, just as Apple continued to develop beyond Jobs himself after entering the Cook era. (The Jobs analogy also raises a question: is there still a possibility of Jensen Huang returning in the future?)
Setting aside the "dark day" for NVIDIA and even the US tech industry, Dan Ives of Yorkville said: "In the AI revolution race, the US tech industry still leads China by a wide margin; this event will instead further intensify competition and the arms race between the two countries."
Bulls believe that the ecosystem Jensen Huang built single-handedly will not dissipate just because he left. Some also argue that for the fate of the AI industry, Jensen Huang's personal importance is less than the philosophy and operating culture he shaped at NVIDIA.
Fundstrat analyst Ken Feng, in a Thursday research note, used the development of The Walt Disney Company after Walt Disney's death as a historical case. In the period right after the founder's death, the company fell into a slump; but Disney's business philosophy and new revenue tracks continued to thrive, other companies rushed to emulate its theme parks and animation model, and practitioners who left Disney founded many successful studios.
"The company Jensen Huang built laid a crucial foundation for the AI era," Feng said. "But whether or not he is still in the position, the market's demand logic for AI will not change; the industry has now grown strong enough to continue pushing forward."
Comments