Jensen Huang’s ouster likely traces back to Nvidia’s risky business practices more than his personal life

A WSJ report suggests Jensen Huang was pushed out more over his business practices than over his affairs. Nvidia built a risky credit program under Huang, the Wall Street Journal reports.

The company offered AI cloud providers and data center developers billions of dollars in financial guarantees so they could afford Nvidia chips. Huang’s son-in-law Nico Caprez pushed the program and promised partners quick closings. In return, the cloud providers were supposed to give Nvidia a cut of their revenue. The largest deal involved talks with OpenAI over a $250 billion guarantee for a data center in Ohio. Nvidia shares fell 5% after the deal became public. Interim CEO Colette Kress, who had been CFO, then cut Nvidia’s commitment to OpenAI in half. The scaled-back deal was signed in August.Ad According to the WSJ, Kress had already questioned internally how the guarantees were valued and what they would return and had tried to rein in Caprez. In an August meeting, Huang reportedly called her “a deer in the headlights” and dismissed her as a mere “reporting CFO” who didn’t help him with strategy or decision-making. Circular AI deals by Nvidia and other cloud and chip companies have drawn criticism since at least last year for inflating a bubble.Ad Nvidia’s stock valuation also reportedly frustrated Huang. The company’s average monthly stock multiple fell from 23 to 16 between May and October, and Nvidia responded with the largest share buyback in its history. Major cloud providers were planning to adopt alternative chips and reduce their dependence on Nvidia. With Nvidia committed to buying large volumes of wafers and memory, Huang described the threat as an “avalanche” rolling toward the chipmaker.Ad At the GTC conference in Berlin in October, Huang used a story about a soup vendor in Japan to put pressure on half a dozen cloud CEOs. He said he had stood in a long line and eaten one of the best soups of his life. When he asked for seconds, the vendor said no because too many people were waiting and he was running out of soup. “He’s a better businessperson than all of you,” Huang told the CEOs, according to the WSJ.