AI supremacy in danger: Huang “cannot replace anyone” at Nvidia

The throne of tech pioneer and Nvidia boss Huang is shaking. After two well-known affairs, the board of directors is already discussing a successor. Market analyst Lipkow considers possible interim solutions to be “poor temporary solutions” and fears for the AI ​​giant’s technological lead.

The name Jensen Huang is inextricably linked to Nvidia. But now the CEO is threatened with dismissal. According to media reports, two extramarital affairs could cost him his job, including one with a suspected Chinese spy. American boards of directors often have a very low tolerance level for affairs in companies; in several cases they have cost top managers their jobs.

A change in leadership would be a turning point: Huang has led the Silicon Valley chip company since it was founded over 30 years ago and was the driving force behind its rise from a graphics card provider to an AI giant. In addition, the company is extremely tailored to him, with around 60 managers reporting directly to him.

According to media reports, the board of directors met for consultations on Wednesday. According to the news website Semafor, some members favor CFO Colette Kress as their successor. The financial service Bloomberg reports that a provisional interim solution is also being considered. For Andreas Lipkow, chief market analyst at CMC Markets, such a decision would only be a short-term emergency solution. According to his assessment, Kress could not take Huang's position. Huang is the architect of the entire group and a technological visionary. “No one can replace this role. Any potential interim solutions would be poor temporary solutions,” says Lipkow.

According to market observers, if Huang leaves, the company could lose its technological lead over competitors such as AMD or its own tech customers. According to Lipkow, Nvidia will not face a dramatic disadvantage in the short term if Huang actually has to leave the company. "In the long term, however, the technology group would no longer benefit from Huang's far-sighted and lucrative strategies as in the previous form." In addition, AMD is not the only competitor hot on Nvidia's heels. "Other hyperscalers such as Alphabet and Meta are also currently in serious development phases and could take advantage of the situation."

Nvidia shares fell more than eight percent in after-hours trading after the Wall Street Journal first reported that the company was preparing to fire Huang. If these losses persist, Nvidia would have lost around $600 billion in market value since the board announced its investigation. For Lipkow, the price decline is not yet a reassessment of Nvidia's business. "It simply represents a risk premium for the prevailing uncertainty." What is more interesting is that AMD and Broadcom shares have risen significantly at the same time. "So the market is already starting to shift some of Nvidia's risks towards its competitors."

But the growing nervousness on the stock market is not Nvidia's only construction site. Because of the alleged espionage affair, the company's sensitive China business is also coming into focus again. Huang has recently campaigned massively to be allowed to continue selling modern chips to China despite US sanctions. His reasoning is that the People's Republic will otherwise develop its own semiconductors that could compete with Nvidia on the global market and thus undermine the USA's AI technology leadership in the long term.

According to Lipkow, whether the government in Washington will completely stop exports to China because of the affair depends on much more than just the current headlines. The US administration will also take other factors into account in its decision and will probably want to avoid a further escalation of the trade conflict. “A renewed escalation would create additional unrest in the current domestic political situation and significantly weaken the position of the US President and his party,” says Lipkow.

Even a complete withdrawal from the Chinese market would have only limited consequences for Nvidia's business model. According to Lipkow, the company is growing exceptionally quickly outside the country and is largely operationally viable without the Chinese market.

As much as Huang has shaped Nvidia, tech history shows that at some point companies outgrow their founders and even the most colorful characters can be replaced. When Apple co-founder Steve Jobs handed over to Tim Cook in 2011, Wall Street feared an end to innovative power - but Cook multiplied the stock market value. Microsoft also survived Bill Gates' withdrawal at the turn of the millennium, which was overshadowed by antitrust proceedings: After a phase of stagnation, Satya Nadella transformed the software giant into a highly profitable cloud giant.

If a break actually occurs, Huang wouldn't be out of a job for long: Elon Musk already announced on X that it would be an honor for him to hire the Nvidia boss.