Nvidia Announces Huang’s Immediate Departure and Names Kress Interim CEO After Shares Fall 14%
Key Facts
Nvidia announced Jensen Huang’s immediate resignation as chair and chief executive and his departure from the board, a leadership shift that puts the company’s continuity under investors’ scrutiny. In a filing with the U.S. Securities and Exchange Commission, the company said Colette Kress would serve as interim CEO while the board searches for a permanent successor. Kress will retain her roles as executive vice president and chief financial officer, positions she has held since 2013. The board appointed Harvey S. Jones as chair on November 11; he has been a board member since 1993. The changes came as Nvidia shares fell 14% at the opening bell on Thursday, November 12, and the Nasdaq declined 1.5%, according to the Associated Press.
The company described the transition as an interim arrangement pending the selection of a new CEO, with Kress retaining control of the finance function during this period. Nvidia said the board has confidence in Kress and the leadership team and expects operations, customer commitments and the product roadmap to continue without interruption. The company’s announcement did not say Kress’s appointment was intended to address oversight gaps; it focused instead on confidence in the team and business continuity. Kress said she was committed to building on the exceptional foundation Huang established during his 33 years of leadership. That pledge puts day-to-day execution and customer service at the center of the transition, alongside the board’s search for permanent leadership.
Jones has a long history on Nvidia’s board, joining in 1993. Since 2004, he has served as managing partner of Square Wave Ventures, a private investment family office. The filing said his experience in entrepreneurship, technology and venture capital spans more than 30 years. His appointment as board chair coincides with Huang’s departure from the board, as well as from the CEO and chair roles. The Associated Press reported that the board had no succession plan and would consider candidates from inside and outside the company. That means the search for a permanent successor will proceed alongside the company’s management under Kress’s interim leadership.
The changes followed questions raised by an investigation announced by the board into Huang’s relationship with businesswoman Alice Huang, Reuters reported. Nvidia lost about $300 billion in market value from the investigation’s announcement on Sunday through November 12, the agency said. The Associated Press quoted the company as saying it saw no reason to believe national security or its secrets had been compromised, but would review the information available. The position outlines what the company has disclosed about the investigation, alongside its commitment to review relevant information. The resignation filing provided no further details on the investigation’s findings or its connection to Huang’s decision.
The share decline came amid a wave of pressure on artificial intelligence stocks that Reuters said coincided with existing concerns about the sector’s financing and regulation. Before the market opened, Nvidia shares were down 10.3%, Reuters reported; the Associated Press then reported a 14% drop at the opening bell. By contrast, AMD and Broadcom shares rose 2% and 1.4%, respectively, amid expectations that Nvidia’s disruption could create an opportunity for competitors. Reuters said the stock was trading at about 12 times estimates for earnings over the next twelve months, its lowest level since November 2012, according to LSEG data. The moves show the contrasting performance of the company and its competitors during the announcement session, while leadership continuity remained the central issue.
The new leadership team faces an early test when Nvidia reports fiscal third-quarter results on Tuesday, November 17, the Associated Press said. The results will be the first scheduled milestone following Huang’s resignation and Kress’s appointment, as the board has said it expects operations, customer commitments and the product roadmap to continue without interruption. Choosing a permanent CEO will also remain an outstanding task for the board, which the report said would consider candidates from inside and outside the company. These issues put the company’s performance and guidance alongside the search for a permanent successor. The backdrop of the share decline and loss in market value keeps the market’s response to the leadership shift and investigation in focus ahead of that date.