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Executive who replaced Jensen Huang was belittled by him, called ‘a deer in the headlights': Report
The board on Wednesday appointed Colette Kress, its current executive vice president and chief financial officer, as interim CEO.
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Former Nvidia CEO Jensen Huang, who resigned on Thursday following reports of alleged extramarital affairs, one including with a woman suspected of spying for China, reportedly belittled Colette Kress, the executive who has now replaced him.
The board on Wednesday appointed Colette Kress, its current executive vice president and chief financial officer, as interim CEO. Kress will continue to serve as executive vice president and CFO alongside her interim role until a permanent successor is appointed.
‘A deer in the headlights’: Huang
Earlier this year in August, Huang called a meeting with top finance executives to address a growing concern: Nvidia was considering providing billions of dollars in financial guarantees to companies that could not afford its chips. These included deals led by Huang’s son-in-law, Nico Caprez, who had been offering financing to emerging cloud providers and data-centre developers in an effort to turn them into long-term customers, the Wall Street Journal reported.
Deep Dive
As the former top chief went across the room, discussing the matter at hand, he proceeded to interrupt and belittle Kress by calling her “a deer in the headlights,” WSJ reported, citing a person familiar with the comments.
Kress was a “reporting CFO,” not someone who could help him define a strategy or make decisions, Huang said during the meeting.
Also Read: Jensen Huang to forfeit $108 million in unvested Nvidia shares after exit: Report
Kress on the top job
With Jensen Huang stepping down as CEO, the responsibility has temporarily fallen to Kress, who was never groomed for the top job. Since the scandal emerged, Nvidia’s shares have lost around 20% of their value, according to The Economist.
Apart from restoring investor confidence, she will have to secure suppliers, improve relations with Washington and manage the complex network of financing deals and partnerships that has driven Nvidia’s rapid growth.
In her first message after being appointed as the interim CEO, Kress praised Huang, saying she was committed to building on the foundation laid by Huang over the past 33 years and continuing the company's work in accelerated computing and artificial intelligence.
"NVIDIA's strength has always come from its people," she said, adding that the company's focus would remain on serving its customers, partners, developers and shareholders.
The finance chief has said she was drawn to Nvidia because of Huang, whom she described as a visionary, and a culture she described in a 2018 awards ceremony interview as “essentially egoless,” according to WSJ.
How Kress helped Nvidia save billions of dollars
Nvidia was in talks with OpenAI to back a massive data-centre project in Ohio, which would be the world’s largest. OpenAI planned to lease the entire facility and fill it with around $300 billion worth of Nvidia chips.
Nvidia was expected to provide a financial guarantee to reassure banks about lending to OpenAI. However, after reports of a proposed $250 billion guarantee sent Nvidia shares down 5% on July 26.
Though Nvidia and OpenAI had been close to closing the deal, over the next couple of weeks, Kress stepped in to renegotiate the deal and cut Nvidia’s initial financial commitment by half, and the two companies signed the smaller deal on August 17, according to people familiar with the matter, WSJ reported.
What led to Jensen Huang’s exit
Huang resigned as Nvidia's chief executive on Thursday, ending his 33-year tenure at the helm of the AI giant he co-founded. This comes after The New York Times on November 7 reported of his alleged affair with Alice Huang, a Chinese businesswoman who US authorities suspect of spying for Beijing.
Huang admitted to the affair in an email to Nvidia employees on Sunday, after the company launched an internal probe.
"I was unfaithful to my wife," Jensen Huang wrote. "My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.
Following reports of his relationship with Alice Huang, Jensen Huang was also accused of having an affair with a company executive who reported directly to him. The New York Times on Wednesday identified the executive as Kimberly Powell, Nvidia’s vice president of healthcare, citing five people who had worked at the company.
Huang has also been accused of reportedly having an intimate relationship with a second, unnamed employee, Reuters reported, citing two people familiar with the matter, taking the total count of affair allegations to three.
US Commerce Secy, Jensen Huang to testify
Huang has been summoned to testify next month before a Senate committee about his alleged affair with a woman suspected of being a Chinese spy.
US Commerce Secretary Howard Lutnick, who is under scrutiny over exports of sensitive Nvidia AI chips to China, has also been summoned to appear before the Senate Banking Committee in December, BBC reported.
US Attorney General Todd Blanche, however, has stated that the Justice Department has not concluded whether Alice Huang, the businesswoman who allegedly had an affair with Jensen Huang, was a Chinese spy, news agency Reuters reported.
At a press conference, Blanche said that "of course" the FBI was investigating reports that Alice Huang was working for the Chinese government.
(With inputs from WSJ)
