Huida's chief financial officer took over as interim CEO. Huang Renxun once commented with "one sentence" before stepping down.

Colette Kress, Interim CEO and Chief Financial Officer of Huida. (Reuters)

[Financial Channel/Comprehensive Report] Huang Renxun resigned from Huida’s CEO and other positions on Thursday (12th) due to a series of extramarital affairs, and current Chief Financial Officer Colette Kress served as interim CEO. According to a person familiar with the matter, during a high-level meeting, Huang once described Kress as a "deer caught in the headlights" and a "reporting CFO" who was unable to formulate strategies or make decisions.

The Wall Street Journal reported that Huang Renxun convened senior financial executives this summer to discuss the faltering AI economy under Huida's big bet. Huang Renxun wanted to ensure that senior executives made the right choice. However, people familiar with the matter said Huang lashed out at CFO Kress during the meeting and interrupted his speech.

Huang summoned Kress and his financial team to assess a growing problem that Huida is negotiating to provide billions of dollars in guarantees to companies that cannot afford its chips. They also include deals led by Nico Caprez, Huang’s son-in-law, who has been providing capital to emerging cloud service providers and data center developers in the hope of converting them into long-term customers.

People familiar with the matter pointed out that Huang Jen-Hsun had set off a wave of trading craze, and now began to wonder whether he had "done too much."

Huang said at the August meeting that Kress was only a "reporting CFO" and could not help him formulate strategy or make decisions. He then went on to describe the company's situation at the time. Major cloud service providers were moving away from Huida and planned to use other chips to reduce their dependence on the company. Huang Renxun bluntly said that what is worse is that the large number of wafers and memories that Huida promised to buy are coming like an "avalanche".

With Kress taking over as interim CEO, he must now lead Huida through this "avalanche" and even bigger problems. Kress needs to stabilize a company that faces federal and internal investigations and leaves one of the world's largest companies by market capitalization without a clear successor. The company said it will consider internal and external candidates for CEO.

Kress praised Huang in a staff memo Thursday and said he will build on the extraordinary foundation Huang has built over the past 33 years.

According to his LinkedIn page, Kress graduated from the University of Arizona and received an MBA from Southern Methodist University in 1996. Kress has held financial positions at companies such as Cisco, Microsoft and TI before joining Huida more than ten years ago.

Kress said he was attracted to Huida because of Huang, a visionary leader, and Huida's "essentially selfless" corporate culture. The organization under Huang's leadership is relatively flat, with about 60 senior executives reporting directly to him, including Kress.

The report also mentioned the difficulties Kress faced when he was chief financial officer. This spring, Huang's son-in-law Caprez and another vice president, Raj Mirpuri, told potential business partners that Huida could arrange credit support agreements within weeks. Dozens of companies are vying to participate in the program, hoping Huida's support will lower their borrowing costs. In exchange for providing credit support, Huida proposed that cloud service providers share a portion of the revenue.

As the plan unfolded, Kress raised questions about how to decide which deals to pursue, how to assess the value of guarantees and how to calculate a return on investment, people familiar with the matter said. Behind the scenes, Kress was trying to rein in Huang's son-in-law, people who have worked with him said.

Huida continues to advance the plan and is negotiating with OpenAI to provide financial support for the largest data center project in history. OpenAI had been negotiating to lease the entire campus and planned to fill it with Huida chips worth about $300 billion. Negotiations continued until the end of summer. At the end of July, there were reports that Huida was considering providing $250 billion in financial support for the project.

Although Huida and OpenAI were close to a deal, in the following weeks, Kress reworked the terms of the deal, cutting Huida's financial commitment to OpenAI in half, according to people familiar with the matter. Finally, the two sides signed a reduced agreement on August 17.

Over the next few days, Huang asked employees to figure out whether the guarantee was worth it, asking them to factor in potential chip sales. According to a report by WSJ in late August, Huida suspended some transactions in a new financing plan aimed at providing credit support to AI cloud providers in exchange for revenue sharing.

In conveying the pause to clients, Caprez and Mirpuri told several cloud companies that Huida's executive team and board were increasing scrutiny of financial support agreements, making it harder to reach agreements quickly, people familiar with the matter said.

Kress publicly defended Huida's role as the "banker" of the entire AI industry, refuting the views of critics. These people believe that Huida's efforts to boost demand across the industry have made it more vulnerable to an economic downturn. Kress described the deals as "smart investments."