Report Links Intelligence Pressure to Huang’s Exit from NVIDIA as Shares Fall More Than 5%
Key Facts
SemiAnalysis analysts said in a report published on November 12 that they believe the U.S. intelligence community was an important factor in the pressure to push Jensen Huang out of NVIDIA. The publication presented this as an analytical conclusion, not evidence of official intervention or proof of the reason for Huang’s resignation. In a separate announcement, NVIDIA said Huang had resigned from leading the company and announced that it had begun searching for a permanent chief executive. The board appointed CFO Colette Kress interim CEO, and said it would consider candidates from inside and outside the company. The board also appointed Harvey Jones, former CEO of Synopsys and an NVIDIA director, as the company’s first chairman.
SemiAnalysis’s explanation focused on the chip-export file to China, saying its model tracks more than 1.5 gigawatts of restricted NVIDIA chips that ended up in China. It added that the estimate does not include chips it says the company designed to circumvent U.S. rules. The publication linked the issue to the possibility of tighter restrictions on chip exports, not to any reason announced by NVIDIA or a government body to explain the resignation. It said a House committee had already approved the RASA legislation and argued that it or similar legislation could advance. The suggestion of an intelligence role therefore remains part of SemiAnalysis’s reading of export and legislative developments; the report did not establish that these developments caused Huang’s departure.
The resignation announcement followed controversy over investigations related to the case. The Associated Press reported that Huang remained CEO when the board announced it had opened an investigation, and that a company spokesperson said the news would not disrupt NVIDIA and Huang would continue leading without interruption. On November 11, Reuters reported that the company’s board had met to discuss the possibility of removing him, and said its rules allowed the CEO to be removed by a majority vote of directors. The agency reported that the board had 11 directors and that all except Huang were independent. In its report before the resignation announcement, Reuters said China had denied allegations related to the case and that it had been unable to reach Alice Huang for comment. The Associated Press also reported that U.S. lawmakers had called for Huang to be questioned about his communications with a Chinese businesswoman and the company’s security protocols, and that the chair of the House Foreign Affairs Committee said he could subpoena him if necessary.
Leadership turmoil and the China issue were reflected in trading on November 12, with coverage citing different figures during the session. Reuters said NVIDIA shares fell more than 5% on Thursday and about 12% for the week ending that day. The agency put the forward price-to-earnings multiple at 12 times, its lowest level since 2012. The Associated Press reported that the stock fell 14% at the open, then closed down about 4% as investors assessed the investigations, lawsuits and the impact of Huang’s departure. Before the resignation announcement, Reuters reported a decline of nearly 7% in early Frankfurt trading and estimated the market-value loss at about $600 billion since the investigation was announced.
Investors’ attention is now turning to quarterly results and the interim leadership’s ability to outline the company’s path after its founder’s departure. NVIDIA scheduled its fiscal 2027 third-quarter results for November 17 at about 1:20 p.m. Pacific Time, followed by the results call at 2:00. According to Reuters, analysts on average expected October-quarter revenue to grow 92% year over year to more than $60 billion, with net income forecast to exceed $60 billion, up 89% year over year, according to LSEG data. Those figures and the accompanying guidance will be the market’s focus on the scheduled date, as Kress remains in the interim role and the board searches for a permanent successor. Huang owns about 3.61% of the company, and Reuters said he would also leave the board.