What to Make of Jensen Huang’s Downfall

As I put fingers to keyboard to explore the Jensen Huang Affair — pardon the double entendre — I understand that whatever I write now is likely to be overtaken by subsequent events. But that’s true of nearly everything, so I won’t let it put me into the deep freeze of analysis paralysis.

Nonetheless, I have good reason to suspect that there’s a lot more to this story than three instances of infidelity, including one allegedly with a Chinese spy (or intelligence asset) and two allegedly with Nvidia employees. These charges, on their own, are serious enough to warrant Huang’s removal from the big chair at Nvidia, even though he is synonymous with the company and a feted standard-bearer of the AI economy.

Let’s begin on this point, though, because the digital Übermensch in Silicon Valley vigorously object to the gist of what I’ve just written. They believe Nvidia’s board of directors, not previously known for its vigorous oversight, has made a serious error in showing the door to Jensen Huang. In a Bloomberg article published earlier this week, they made their case as follows:

“Dark, dark day,” Andreessen Horowitz general partner Martin Casado said in a post on X. “Horrible decision for the U.S. and the western world.”
Alex Bouaziz, CEO of HR software startup Deel, declared Nvidia’s move “a mistake.” Raj Gokal, co-founder of blockchain company Solana Labs Inc., said it was “a generational fumble.” Others, including Runway AI Inc. co-CEO Cristóbal Valenzuela and Conviction founder Sarah Guo, called it “a big loss.”

Some tech leaders went so far as to leave the door open to hiring Huang one day. Casado said it would be “an honor” to have Huang join Andreessen Horowitz. SpaceX CEO Elon Musk used similar language in his own post Wednesday, before Huang had resigned.

We’re in Upside-Down Land

To be clear, these luminaries are not condemning Huang for (among other things) his awful misjudgment, dereliction of duty, and managerial irresponsibility. Instead, they’re lamenting and pillorying Nvidia’s decision to act responsibly and hold their CEO to account.

Reading these repudiations of the Nvidia board, I get a disorienting feeling that I’ve experienced too often recently, a sense that the ethical order has been upended: up is now down, day is now night, coffee is now tea, bad is now good. I asked myself (as I do now): What the hell is happening? Has the world, or the parts of it blessed with money and power, gone mad?

The digital aristocracy in Silicon Valley doesn’t practice noblesse oblige. In their social milieu, privilege does not entail responsibility. To the contrary, they believe privilege is a meritocratic prize that confers exemptions from the rules that apply to serfdom. Rather than noblesse oblige, they would seem to prefer droit du seigneur.

In the technology industry, we tend to like standards, but that doesn’t mean we should embrace double standards. Leaders should not be exempt from laws or shielded by impunity. If anything, leaders should be held to a higher standard, to an expectation that they will lead by example, not only in their business or technical proficiency but in their character and integrity. Too much, perhaps?

Maybe that is a bridge too far, and I’m asking too much, but an abnegation of responsibility doesn’t seem the best path forward. What passes for leadership in Silicon Valley is not really leading in the sense that matters most.

Leakers and Their Motives

I said earlier that I suspect strongly that there’s more to this story than has been disclosed (leaked might be better word). Although Jensen Huang was undeniably indiscreet, many aspects of his downfall were leaked to the press, including the New York Times, Financial Times, Wall Street Journal, Reuters, and Bloomberg. I wager there is more to come, but I wonder about the identity or identities of the source or sources.

The fact is, not many people had an incentive to oust Jensen Huang from Nvidia. Let’s play detective and review the suspected leakers.

Could the leak have come from China? That’s unlikely. China has no incentive to admit to or reveal geopolitical corporate espionage. Where’s the benefit for China? I don’t see any. If the allegations are true regarding sexpionage, China had no reason to out its own agent/asset. To the contrary, China would benefit from keeping matters hidden for as long as possible.

What about the Trump Administration? Again, there’s no incentive for Trump or Howard Lutnick, among others, to leak stores that damage and embarrass Nvidia, AI, and the U.S. government. It’s become glaringly obvious that everybody emerges from this story in different shades of bad.

Similarly, nobody at Nvidia, or at other AI companies, would have an obvious incentive to topple Jensen Huang. Well, allow me to qualify that statement. Nobody at the top of the hierarchies in those organizations has an incentive to depose Mr. Huang, but what about others, further down the pecking order, in those organizations?

This is where things get interesting. I’m not about to speculate on who might have leaked these profoundly damaging revelations, but I will say that Jensen Huang, like any major Silicon Valley CEO, has alienated and antagonized more than a few people during his indelicate reign atop Nvidia.

Some of those people are in government — not Trump, but working within the administration — some of them work elsewhere in the AI firmament, and some — it should come as no surprise — are among the people who worked for Huang at Nvidia. There’s even a chance that certain Nvidia customers, perhaps displeased with the dispensation of Nvidia’s circular financing or GPU allocations, might have taken offense.

It’s mentally stimulating to wonder who dropped the dime on Jensen Huang — the journalists that broke these stores had their sources, capable of providing confidential information beyond the reach of casual observers — but it’s a speculative exercise with no conclusive end. We cannot know who fed, and keeps feeding, the media.

Will the disclosures and stories end now that Jensen Huang, in his trademark leather jacket, has left the building? I’m not so sure. In fact, I would say there’s more to come. What specifically, I do not know.

Finally, I’d like to say a word about the alleged indispensability of Jensen Huang to Nvidia and, more broadly, to the sustenance of the AI bubble.

Exploding the Myth of Irreplaceability

The Great Man theory of history is in full flower in Silicon Valley, even though history tells us that nobody, strictly speaking, is indispensable. Life goes on, Silicon Valley CEOs, even when you’re not there. Will Nvidia miss the major contributions that Jensen Huang has made to its growth and success? Yes, that seems all but certain. Can he be replaced? Yes, everybody can be replaced. These assertions are not mutually exclusive.

Beth Kowitt of Bloomberg challenges the myth of the irreplaceable CEO and finds that history thoroughly refutes the premise. The real challenge for the next full-time CEO at Nvidia is that Jensen Huang did his utmost to make himself irreplaceable. He helped to establish a relatively meek and toothless board of directors, and he established a management hierarchy (if we can dignify it as such) that spurned succession planning and discouraged the career development of underlings harboring CEO ambitions.

The Nvidia board was severely remiss, negligent in its essential duty to shareholders, customers, and other stakeholders. Every company needs a succession plan. A CEO is one health crisis, fatal accident, or criminal proceeding from the exit door. Nobody can precisely predict the future, but we should all prepare for potential scenarios, especially unfavorable ones.

Nvidia is not the only major tech company that has allowed a hubristic CEO to enjoy unqualified rule. It’s like gambling in a casino, but these companies and their boards of directors should remember that the house always wins.