Bessent Calls on Nvidia to Make Leadership Change and Seek CEO From Outside Company
Key Facts
U.S. Treasury Secretary Scott Bessent called on Nvidia on November 15 to make a major change in its leadership and seek a chief executive from outside the company, escalating political pressure on the company amid scrutiny of chip exports to China. In a television interview, Bessent said the company needed a “radical change” in leadership, pointing to its corporate culture and handling of sales that raised suspicions. His remarks came after Jensen Huang resigned as chief executive the previous week. Bessent did not tie the 10-day deadline to choosing Huang’s successor; the deadline concerns answers from the board and its outside advisers to compliance questions. The separation of the leadership issue from the export investigation puts the company on two tracks at once: choosing permanent leadership and responding to questions about trade controls.
Speaking about chip sales, Bessent asked whether Nvidia had knowingly ignored signs that front companies, many of them in Singapore, were routing chips to China. He also raised the possibility that illegal sales were used to boost revenue and profits, saying: “I always want to return to the question of the culture at Nvidia, and whether it was driving these sales that appear illegal to boost its revenue and profits?” These questions remain part of scrutiny of the company’s handling of restrictions, while Bessent’s remarks focus on leadership responsibility and corporate culture. Megaspeed is under scrutiny over allegations that it transferred advanced Nvidia chips to Chinese companies. Megaspeed did not address the specific allegations about chip transfers in its statement, reported by The Associated Press. The facts cited here do not establish a specific value for the chips allegedly diverted.
Nvidia’s board accepted Huang’s resignation from his posts as chairman, chief executive and board member on November 11, effective immediately. The company appointed Chief Financial Officer Colette Kress interim chief executive as the board searches for a permanent successor. Kress has served as executive vice president and chief financial officer since joining the company in September 2013. Independent directors announced on November 10 that they had tasked John Kim, a former acting U.S. attorney for the Southern District of New York, and law firm Wachtell, Lipton, Rosen & Katz with conducting an independent investigation. On November 11, the board appointed Harvey C. Jones as chairman; Jones has been a board member since 1993. The search for a permanent chief executive is therefore proceeding alongside an independent investigation into the issues raised.
Bessent’s position differs from the process the company has announced for choosing its next chief executive: Nvidia said the board would consider candidates from inside and outside the company. His call to look outside the company comes as Kress leads on an interim basis, while the company has not specified in the available facts when it will announce a permanent chief executive. The independent investigation adds sensitivity to the selection process, as the questions raised concern the company’s compliance with export controls and its handling of sales that prompted suspicions. Discussion of corporate culture also puts leadership at the center of the scrutiny. The decision on a permanent candidate remains with the board, which has said it will weigh internal and external candidates.
Nvidia’s latest financial results provide a backdrop for the scale of the business the interim leadership will oversee during the transition. The company reported revenue of $96.2 billion in the second quarter of fiscal 2027, ended July 26, up 18% from the previous quarter and 106% year over year. Data-center revenue was $89.0 billion, up 117% from the same period a year earlier. In its August outlook for the third quarter of fiscal 2027, the company estimated revenue of $108.0 billion, plus or minus 2%. Nvidia said it had assumed no data-center computing revenue from China in that outlook. The figures underscore the importance of the export issue to the company’s business without resolving the investigation’s impact on its future results.
Nvidia shares closed at $162.85 on November 13, compared with a close of $178.67 on November 9, according to EL7 data. These prices put the stock’s performance in the period before Bessent’s remarks in the context of pressures surrounding the company, but do not isolate the effects of the leadership issue or scrutiny on trading. Investors are also focused on the next financial report, due before the conference call on November 17. The company said third-quarter fiscal 2027 results would be released at approximately 1:20 p.m. Pacific time, as previously announced. The results will provide the next financial indicator during Kress’s interim tenure, as the board continues its search for a permanent chief executive and authorities follow the compliance issue.