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Bloomberg Television1h 35m

Nvidia Weighs Ousting Jensen Huang as Infidelity Scandal Deepens

Jensen Huang, Haidi Stroud-Watts, Avril Hong, Rolf Bulk, Chris Weston, Max Kettner, Bob O'Donnell, Mabel Hong, Hardy Stratton, Michael Shepherd, Sonny Bangia, Mandeep Singh, Tom Giles, Ivan Espinosa, Nicholas Takahashi, Anthony Stevens, Stephen Tseng

Earnings Call, Interview, Fireside Chat, Conference Presentation
  • NVIDIA's board is preparing to subpoena CEO Jensen Huang regarding allegations of an affair with a suspected Chinese spy and is working with an outside firm to find a successor, potentially appointing an interim leader like CFO Colette Kress or AMD's Lisa Su, though the company currently lacks a formal succession plan.
  • Market participants anticipate that a leadership change may result in more conservative financial guidance, a tapering of NVIDIA's aggressive deal-making and "circular financing" model, and a shift where traditional institutions like Blackstone and BlackRock finance AI engagements.
  • While orders are booked through 2027 and the Rubin and Blackwell chip rollout remains on schedule, analysts project Q1 2028 revenue at $144 billion rising to $164 billion, with gross margins potentially exceeding 72%.
  • NVIDIA expects 70 to 100 percent revenue growth next year with locked-in supply, but face risks of tighter export controls to China and competitors like AMD, Google, and Amazon gaining market share if NVIDIA's leadership stability wavers.
  • The AI demand narrative is being supported by OpenAI's $10 billion quarterly revenue and Anthropic's accelerating ARR, with an oversubscribed IPO potentially stabilizing valuations at a $1.5 trillion floor despite the NVIDIA crisis.
  • General Counsel Tim Teeter has engaged the Commerce Department regarding an investigation into Megaspeed, raising questions about internal knowledge of company secrets and potential national security exposure.
  • Supply chain relations with TSMC are expected to remain stable driven by fundamentals, though suppliers may increase capacity for competitors if NVIDIA transitions leadership, and H200 chips are currently delayed in Hong Kong.
  • China faces a multi-year bottleneck in developing its own AI ecosystem due to an inability to manufacture at 3nm and 2nm nodes, while planning a $2 billion sovereign bond sale in Hong Kong in the week of November 16, which could see yields rise from 1.6% to 2.2% if the PBOC taxes bond interest.
  • Geopolitical tensions are ongoing with the U.S. naval blockade of the Strait of Hormuz and potential diplomatic talks between Vice President J.D. Vance and Iranian officials, alongside U.S. efforts to find a peaceful off-ramp to the war in Iran.
  • Nissan is targeting 500 billion yen in total savings by the end of the fiscal year, having achieved 365 billion yen in 18 months, with a new strategy focusing on RoboTaxi partnerships to be announced in February.
  • Asian markets show mixed reactions, with Japanese stocks expecting a rebound and South Korean stocks holding relatively firm despite NVIDIA fallout, while foreign investors have been selling in Taiwan for 10 consecutive days.
  • The broader market is assessing whether the "key man risk" of Jensen Huang is fully priced in given the 30% drop in stock, and if the AI cycle narrative will shift from an "end of cycle" view to one of resilience driven by successful IPOs.