Nvidia CEO Jensen Huang is perhaps the most indispensable figure in the tech world. He has tied himself to the artificial intelligence boom more than anyone and made himself into a one-man executive suite such that it’s almost impossible to imagine Nvidia without him.
And yet, as details of Huang’s extramarital affair with an alleged Chinese government spy who may have ciphoned off trade secrets continue to come out, the impossible requires more consideration. After all, we’ve gone from Huang being the victim of a honeypot scheme to having an affair with a straight-up Chinese security asset to questions about just how much Huang knew about Megaspeed, the firm his mistress was an executive for, allegedly circumventing US sanctions to acquire Nvidia chips—and just how much the US government knew about Huang’s compromising situation.
The situation is bad enough that the Nvidia board is launching an investigation into the matter, and while it still seems extremely likely that it turns up nothing that would disqualify its CEO from running the show—it has already stated that it has no reason to believe trade secrets or national security were compromised by his actions, per the Wall Street Journal—it does seem like there is at least enough there there to make people wonder if Huang will survive the inquisition.
One of those people is Dan Ives, a high-profile analyst and one of the market’s most prominent tech bulls. In a recent post on Twitter, the tech booster had a rare bearish proclamation, suggesting that there is a 15% chance that Huang gets ousted as the head of the firm that he’s ruled over for decades. Were that to happen, Ives warns, the company’s stock would see about 25% to 30% of its market capitalization get lopped off almost immediately, under the guise that Huang single-handedly provides that much value.
Of course, that estimate from Ives still gives Huang an 85% chance at survival, but the fact that it’s anywhere but 0% would have been shocking a week ago. However, built into Ives’ analysis is the reason the odds are still so high that Nvidia would hang on to an executive who got tangled with an executive at a firm that his company does business with and a perceived adversarial government: Somehow, the market sees having that guy at the helm as more valuable than replacing him with someone else.
Nvidia has been getting hammered on the stock market for days now, both as part of the ongoing market sell-off that hit tech following the midterms and as uncertainty clouds Huang’s status at the company. Despite that, it still has a market cap of over $4 trillion. That means by Ives’ math, Huang’s potential ouster would cost the company about $1.2 trillion.
For some perspective, Anthropic is preparing for its initial public offering and is looking for a valuation at just north of $1.2 trillion—a figure that would make it one of the largest IPOs in history. Nvidia would be staring down the possibility of giving that much up by voting out its CEO—and pushing Huang out the door would only set off a domino effect of other issues that could further punish not just the company’s stock, but the economy as a whole.
Huang can be ousted much more easily than other tech executives like Mark Zuckerberg or Elon Musk, who have built in so much protection into the ownership structure that they would be functionally impossible to push out. According to the company’s bylaws, he could be removed as CEO by a two-thirds majority vote from the company’s board, which currently has 11 people, including Huang. But even doing so would not remove him as director of the company or kick him off the board.
And he still has lots of allies in the company, including his family (assuming, you know, they aren’t too pissed at him for blowing up their personal lives). Per The Guardian, his kids have leadership roles at the company and his wife controls over 60 million Nvidia shares through a family foundation. It’s not enough to save him outright if a vote went to shareholders, but it’s enough that he’d only have to rally so much external support to save himself—especially considering the threat that moving on from Huang would make their shares worth less.
Should he get axed, though, Nvidia’s board will be very busy because, according to Axios, there is no succession plan in place for life after Huang. As CEO, Huang has reportedly maintained dozens of direct reports who keep him informed on happenings across the company—and keeps those individuals siloed from seeing the full picture, making them less suited to take over as the head of the whole thing.
There’s also the Great Man Theory of it all, and Huang has certainly cultivated an image under that framework. He’s considered a visionary and uniquely positioned to lead the company through the AI era, and Nvidia would be hard-pressed to find someone else who would immediately conjure up the kind of market-calming presence that Huang has made for himself.
Huang has also tied himself to the company in a way that makes it hard to imagine it without him. Back in January, during an appearance on Jodi Shelton’s A Bit Personal podcast, Huang said of the possibility of someone else taking over Nvidia one day that, “There will never be one like me, and the reason for that is because I was raised by the company.”
There will undoubtedly be more scrutiny coming to Huang and his relationship with a one-time executive and apparent spy, and how he let that affair influence his decisions as Nvidia’s chief decision-maker. He’ll almost certainly get dragged in front of Congress over it and will have to navigate lots of scrutiny.
Maybe it really is a new era of accountability and some in the government are willing to serve Huang up as a sacrificial lamb to send that message. But given Nvidia’s status as a load-bearing stock for Wall Street that makes up a sizable chunk of most major indexes, and given that parts of this scandal seem to stretch across two different administrations that may or may not have known more than they let on, there’s reason to expect the status quo will be maintained.
