Jensen Huang's removal as Nvidia CEO likely had more to do with the company's business practices than with his personal life, The Decoder reports, citing the Wall Street Journal. According to the WSJ, Nvidia under Huang offered AI cloud providers and data center developers billions of dollars in financial guarantees so they could afford Nvidia chips. In return, the providers were to give Nvidia a cut of their revenue. Huang's son-in-law Nico Caprez pushed the program and promised partners quick closings.
The largest deal involved talks with OpenAI over a $250 billion guarantee for a data center in Ohio, and Nvidia shares fell 5% after it became public, The Decoder reports. Interim CEO Colette Kress, formerly CFO, cut Nvidia's commitment in half, and the scaled-back deal was signed in August. The WSJ says Kress had questioned internally how the guarantees were valued and what they would return. At an August meeting, Huang reportedly called her "a deer in the headlights" and a mere "reporting CFO."
The WSJ also reports that Huang was frustrated by Nvidia's stock valuation. The company's average monthly multiple fell from 23 to 16 between May and October, and Nvidia responded with the largest share buyback in its history. Major cloud providers were planning to adopt alternative chips, a threat Huang described as an "avalanche" given Nvidia's commitments to buy wafers and memory. At GTC in Berlin in October, he told cloud CEOs they were selling too much compute to a few big customers.
The Decoder notes it has not been reported whether Huang left voluntarily or whether the board used his affairs as leverage. Separately, CNN reports that the spy allegations involving Alice Huang rest on shaky ground.
