The guarantees that worsened the risk profile
According to the Wall Street Journal, cited by The Decoder, Jensen Huang's removal from Nvidia's leadership would be attributable mainly to the company's business practices rather than to events in his private life. Under his management, Nvidia reportedly offered artificial intelligence cloud providers and data center developers multibillion-dollar financial guarantees designed to enable them to buy the company's chips. In exchange, the partners were to give Nvidia a share of their revenues. The program, the source reports, was promoted by Huang's son-in-law, Nico Caprez, with the promise of rapid deal closings.
The most delicate point concerns negotiations with OpenAI for a $250 billion guarantee intended for a data center in Ohio. When the transaction became public, according to the U.S. newspaper, Nvidia's stock lost 5%. Then-CFO Colette Kress, who later became interim CEO, reportedly halved the commitment to OpenAI; the scaled-back agreement was signed in August. Kress herself had reportedly already raised internal doubts about the valuation of the guarantees and expected returns, seeking to contain Caprez's activities. The reconstruction remains attributed to the source and is not confirmed by Nvidia.
The internal rupture and pressure on partners
Also according to the Wall Street Journal, at an August meeting Huang reportedly called Kress a person incapable of seeing beyond the immediate and dismissed her as a CFO devoted only to reporting, of little use on strategy and decisions. This is the passage that, in the newspaper's reading, explains why the conflict over risk management became an internal fracture. The Decoder also recalls that circular transactions between Nvidia and other cloud and chip companies have been criticized at least since the previous year for fear they are fueling a bubble.
The material also indicates other tensions. The stock market valuation reportedly frustrated Huang: the stock's average monthly multiple fell from 23 to 16 between May and October, and the company reportedly responded with the largest share buyback in its history. Major cloud providers were planning to adopt alternative chips to reduce dependence on Nvidia and, with the company committed to buying large volumes of wafers and memory, Huang reportedly described the threat as an avalanche coming. At the GTC conference in Berlin in October, he reportedly used the story of a Japanese soup seller to criticize half a dozen cloud CEOs, accusing them of selling too much computing capacity to a few large customers and of not valuing his products.
What has not been established
The source does not clarify whether Huang left voluntarily because the situation was slipping away from him—a hypothesis The Decoder considers unlikely—or whether the board used the private matters as leverage. On a separate level, the espionage accusations involving Alice Huang would rest on fragile foundations according to CNN: the information gathered so far would not prove she worked for Beijing, and within the U.S. government there would be no agreement on the strength of the evidence. Still to be verified, therefore, are the actual dynamics of the exit, the exact terms of the guarantees, and their accounting.
