Dan Ives & Gene Munster Talk Nvidia, Jensen Huang

SPEAKER_1 (0:02)

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Nathan Hager (0:07)

Wall Street, AI Investors and Nvidia itself find themselves this morning in a position few might have thought possible just a few short days ago, thinking about the direction of the AI industry without Jensen Huang at the helm of Nvidia, the company he founded more than three decades ago. The AI chip giant's now leaning on its chief financial officer, Carolyn Crest, to lead the company for now after Huang's ouster by its board following reports of multiple extramarital affairs, including with a woman who may be a Chinese spy.

Gregory Allen with Decision Tree Research says Nvidia is now in a very tough place.

Gregory Allen (0:46)

Jensen has previously described Nvidia, the company, as the F1 car built around him as the driver. Everyone else in that company is a specialized component, an engine, a wheel, an axle, a turbocharger. There is no one else who is set up to be a leader.

Nathan Hager (1:05)

That's Decision Tree Research CEO Gregory Allen. Joining us for more analysis this morning after Huang's departure, are two of some of the biggest names when it comes to the tech space on Wall Street. Dan Ives with us this morning in our Bloomberg Interactive Brokers Studio. Dan is the founder and managing partner at Yorkville Ives, and Gene Munster is with us as well, managing partner at Deepwater Asset Research. It's great to have both of you with us this morning on daybreak. To think about Nvidia as this F1 supercar, gets to your note, Gene, out this morning after that the challenge for Nvidia, the central challenge is to maintain urgency. How difficult is it going to be for Nvidia to stay in the lead, to keep the AI race going without Jensen Huang in the cockpit? Good morning.

Gene Munster (1:58)

Good morning.

I'll start with, I'm a shareholder of Nvidia, so I think that the near term, I'll describe that as the next couple of years, are going to be in a great place. To answer your question about how difficult is it long term, it's extremely difficult. And to put it in the perspective, if you look at the playbook for companies that have been generational tech companies that have had these spectacular outcomes, and that's if you're investing today what you're looking for, one of the key common characteristics is that it's founder led, number one, and number two, those founders tend to have a wartime or really intense sense of urgency. And we can go through everything from Jobs to Zuckerberg, to Cart from Palantir, Elon, and then of course Jensen. And so I can't think of a great example of a company that has had these exponential returns once the founder has left. I do want to mention though that urgency is not binary. It's just there's a scale on it. And so it will not have, I mean, I think it's by, it's definitely impossible for Nvidia to have founder urgency because the founders no longer there. But that doesn't mean that they cannot have urgency. And I would kind of pull it all together is that if you think about the job of the board right now, it's to do, I think their number one goal should be to try to find someone who has that sense of urgency. Because I think that ultimately is going to what's going to keep them competitive in years three through 10

Nathan Hager (3:27)

Dan Ives, let's bring you into the conversation as well. You have called Jensen Huang the godfather of AI. Now that Jensen Huang is out, who potentially steps in? Is there someone who can lead Nvidia at the kind of level that Jensen Huang has not just for Nvidia, but for the AI industry as a whole?

Dan Ives (3:46)

Yeah, and I thought Gene put it perfect in terms of some of the challenges was some of the opportunities for Nvidia. Look, in my opinion, I just think you when you look at Jensen and you look at going forward, it's a dark day for Nvidia. It's a it's a black eye moment for Jensen. But the reality is, I think they're going to need someone from the outside. I mean, we've talked about Tim Cook and the Keshen Powell out there, I think I'm hearing from Google that probably leads them forward. Colette, I think that is the best candidate internally. She has so much respect internally and externally. But there's a gut check moment for Nvidia.

And it goes back to...

As I used to refer to Jensen as the godfather and all the stuff that he created. It's a blessing as it goes up. It's a curse as it goes down, especially with no succession plan that Nvidia had.