Jensen Huang's Sudden Departure Raises Questions: Did the White House Intervene? Is a Return Possible?

The sudden and dramatic departure of Jensen Huang, founder and CEO of NVIDIA, has left a series of unresolved questions. From the board's public expression of confidence in him on Sunday to Huang's formal resignation on Wednesday night, what transpired in just a few days remains inconclusive. This shake-up in the tech and capital markets not only raises suspicions about potential pressure from the White House but also leaves investors uncertain about NVIDIA's future business direction.

According to a securities filing by NVIDIA, Huang resigned on Wednesday night. Notably, multiple reports on the board meeting on Wednesday evening included contributions from Washington reporters—journalists who typically do not cover NVIDIA. Reports from tech media outlet The Information on November 12 suggest that this has led to speculation about whether the White House leaked information to the media to pressure Huang into resigning. The answers to these questions are expected to emerge eventually, but they remain unverified for now.

Following the announcement, NVIDIA's stock rebounded from a low on Thursday, indicating that some investors believe the sell-off over the previous two days was excessive. By Thursday's close, NVIDIA's stock price was around $166, corresponding to a forward P/E ratio of only 13.7, while competitor AMD's forward P/E ratio soared to 38.9. This significant valuation gap reflects the market's deep concerns about NVIDIA's direction after losing Huang.

The Irreplaceability of Jensen Huang: The "Soul" of the Ecosystem

The tangible impact of Huang's departure on NVIDIA's business may take one to two years to manifest. However, discussions about whether his successor can fill his shoes have quickly emerged in the industry.

Doug McLaughlin, president of SemiAnalysis, pointed out in an interview with TITV, a subsidiary of The Information, that Huang's influence on the AI technology roadmap is unique. He stated:

"The entire ecosystem really coalesces around Jensen... He is a special person who convinced everyone that this technology roadmap would come true, and he pushed it forward through pressure, lobbying, and, of course, significant funding, truly driving the advanced technology timeline to fruition."

McLaughlin also noted that Huang secured a "significant part of the supply chain" through aggressive commitments, ensuring that NVIDIA could still obtain ample supplies when other companies faced chip shortages. This high-risk bet was made possible in part because he is the company's founder—his successor may be more conservative.

The Information also reported on interim CEO Colette Kress, noting that during her tenure as CFO, she had raised objections to several deals pushed by Huang.

Short-Term Stability, Long-Term Uncertainty

In the near term, NVIDIA's business fundamentals are expected to remain intact. According to The Information, multiple customers have indicated that the ongoing shortage of NVIDIA chips is primarily due to the superiority of its products in the industry.

However, after Huang's departure, some customers may be bolder in testing alternatives—previously, concerns about offending Huang somewhat restrained customers' willingness to explore competing products.

Regarding the management transition, reports suggest that the board may take up to six months to identify Huang's permanent successor, and if the successor comes from outside, additional time will be needed for their formal appointment. By then, the AI industry itself may have undergone several rounds of evolution, and the new management will face a competitive landscape that is starkly different from Huang's era.

Precedents for Founders' Return: Is Huang's Comeback Possible?

Just hours after the news of Huang's departure broke, speculation about his return began to surface in the market. Former Twitter CEO Dick Costolo posted on X, stating, "In three to four years, NVIDIA will miss a couple of quarters, and then they will bring Jensen back to steer the ship again."

This speculation is not without basis. Cases of founders returning to lead their companies are not uncommon in the tech industry. The most well-known example is Steve Jobs' return to Apple in the late 1990s. In February of this year, Workday co-founder Aneel Bhusri returned as CEO; on the same day, HubSpot co-founder Brian Halligan also resumed the CEO position five years after stepping down, succeeding the previous CEO who was promoted from Chief Customer Officer, Yamini Rangan.

The HubSpot case is particularly illustrative. According to The Information, Rangan's performance during her tenure was not poor—she increased the company's revenue from $1.3 billion in 2021 to an expected $3.7 billion this year. However, HubSpot's stock has fallen 74% over the past five years, with investor concerns about AI's impact on software business being a major source of pressure. After Halligan's return, HubSpot's stock rose 6.4% on Thursday.

Analysts believe that for NVIDIA, whether Huang will return in a similar manner remains an open question.