🥀 Jensen Huang’s remarkable ouster

In a turn of events that would have been shocking even a week ago, Jensen Huang is out as the CEO of Nvidia after his position leading the most important chipmaker in the world became untenable following the development of a series of scandals about his conduct. 

• The move comes at a major inflection point in the AI trade, after several months of the biggest names from Intel to the AI labs to the neoclouds being rattled by earnings, the debt market, and somewhat ambiguous vibes around the ultimate value of this technology and the ultimate ability of the companies involved in the AI trade to capture it. 

• Huang had long been the sector’s biggest cheerleader, its financier, and the guy responsible for selling the single most valuable piece of hardware technology in the whole boom. 

• The coming weeks will reveal precisely how necessary Huang is to the action here. Consider it a fundamental test of the “great man theory of history” as it applies to business. Was Nvidia successful because of Huang’s particular vision and networking ability? Or will Nvidia be able to continue its run absent its leather-jacketed leader, because at this point it’s not exactly rocket science selling a GPU to a data center.

• The manner of Huang’s departure will at the very least likely be bruising for Nvidia in the short- to medium-term; the scandal began when it was reported that Huang was engaged in a romantic entanglement with a woman who had been identified as a likely Chinese intelligence asset. The incident that precipitated his actual departure — reporting that indicated this sort of behavior was not exactly exceptional, and that Huang had allegedly been involved with co-workers too — doesn’t exactly paint a great picture.

Either way, now Congress is getting involved, as House investigators tend to hate it when the businessman behind the single most important piece of technology of the decade gets honeypotted by America’s primary geopolitical and industrial rival.

The Takeaway

Nvidia shares took it on the chin this week, but retail traders appear to be bullish on the company’s ability to perform well absent Huang. According to my colleague Luke Kawa and the EntryPoint newsletter, traders have been enthusiastically buying the dip here in anticipation that, however things shake out with Huang, people are going to need those graphics cards and they’re probably fine buying them from Colette Kress for the time being. 

Indeed, one plausible fallout of this stands to benefit the large firms helming the AI industry in the United States. The frontier labs have long argued that tough regulation of AI, especially the open-source AI that dominates China’s role in the emerging tech, is a necessity. Huang opposed that, through his desire to export his chips to whoever would buy them and his support of the open source world of models  and his purchase of HuggingFace. Not only does the cloak-and-dagger nature of this scandal undermine that argument and call into question his motivation for making it, it also effectively removes the staunchest advocate for open model development from the political circles where he could make a difference. 

— Walt Hickey

• 🏈CFB: It’s a big college football Saturday, with No. 22 Missouri at No. 1 Georgia (Georgia 88% favorites), then the No. 6 Texas taking on No. 21 LSU (LSU 67% favorites) and No. 18 USC at No. 9 Indiana (Indiana 75% favorites).

• 🏈 NFL: A couple of huge games this weekend for the NFL, with the San Francisco 49er the favorites as they take on the Dallas Cowboys (Niners 67% faves), a Sunday Night game where division rivals the Pittsburgh Steelers and the Cincinnati Bengals go head to head (Bengals 63% favorites) , and a big early game for Minnesota and Green Bay (Packers 61% favored). 

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC, ForecastEX, LLC or Rothera Exchange and Clearing LLC.

That is the average price of a new vehicle in the United States in October, a record high.