Nvidia’s leadership shakeup could reshape the AI industry

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Meghan McCarty Carino (0:31)

The AI boom gets hit by an AI earthquake. From American Public Media, this is Marketplace Tech. I'm Meghan McCarty Carino.

Jensen Huang is out as the CEO of Nvidia. Where the heck does that leave us? We'll get into it on today's Marketplace Tech Bytes, Week in Review. Plus, some good news in AI. The debt-laden NeoCloud core weave delivered strong earnings. And the tech industry's pivot to the left begins with Palantir?

But first, back to this week's big story. After Jensen Huang's resignation, Nvidia's board named Chief Financial Officer Colette Kress as Interim CEO. But a whole lot of questions remain. Here to help us answer them is Anita Ramaswamy, Financial Columnist at The Information.

Anita Ramaswamy (1:30)

I think that Nvidia has entangled itself in so many different corners and pockets of the AI market. They have really propped it up in a big way by funding a lot of different startups, a lot of other companies, a lot of even their suppliers. And Jensen has been seen as sort of this visionary CEO who has really incubated the company for more than a decade, you know, to where it is today.

And I think this is the risk with such a, you know, almost like founder-led CEO visionary kind of company is that it looks really good on the way up, but then on the way down, if anything goes wrong, the company's fortunes and fate is so indexed to just one individual.

Meghan McCarty Carino (2:08)

Yeah, so this news has caused quite a sell-off in Nvidia shares on Wall Street. The company's chief financial officer, Colette Kress, has been named the interim CEO while the board conducts, you know, a nationwide search for a new CEO. So what kind of questions do you think investors are asking right now about the company's future?

Anita Ramaswamy (2:28)

I think the biggest question is who is going to be Jensen's long-term successor. Presumably, it's not going to be the CFO. You know, Colette has been at the company for a long time, but it's more likely that they're going to try to find somebody who is more strategic, somebody who has led another large semiconductor firm. I thought it was interesting to see that Nvidia appointed its first chair of the board, Harvey C. Jones, who comes from Synopsys, which is a chip design firm, and he served as CEO there for quite some time. So it might be interesting to see, is it going to be him? Is it going to be some of the other names that I've seen thrown around are Renee Haas, who is CEO of Arm Holdings, which is another chip design firm.

So there are a lot of different candidates on the table, but Jensen also has some 60-something direct reports. So it's very possible that they're going to find somebody who internally they can promote to the role.

Meghan McCarty Carino (3:17)

Competition with China has obviously been at the heart of this scandal. Where do you think this outcome leaves the USAI industry in that competition with China?

Anita Ramaswamy (3:29)

It could be in a very precarious place, just given what's transpired over the last year or two. So just to zoom out a little bit, in December 2025, the Trump administration approved Nvidia to sell its H200 chips to companies in China. Chinese revenue, if you look at Nvidia's financial statements, makes up less than 10 percent of their overall sales, but it's still a large chunk and there are some research firms out there that speculate that Nvidia actually has a lot more China exposure than that. That's through selling through companies that are maybe headquartered in Singapore or other parts of Asia.

Even more so, the New York Times came out with this report that was alleging that Nvidia was actually selling to companies that were sanctioned by the US government in some way, that are Chinese companies. They have been approved for chip sales to China. It could be a fairly substantial chunk of their revenue. That's one big concern. When the Trump administration actually approved this, they said, you guys can sell chips to China, but the US government is going to take a 25 percent cut.

It's this appeasement on both sides where we had seen a lot of tension, and then the two agreed to work together in this trading capacity. I think that this revelation with Jensen and his potential relationship with an alleged Chinese spy really calls all of that into question.