Wall Street: “Jensen Huang won’t be ousted, but...”

[Financial News]  

Wall Street analysts offered varying views on the 9th (local time) about how NVIDIA CEO Jensen Huang’s affair with a woman accused of being a Chinese spy could affect the company’s future and the artificial intelligence (AI) industry as a whole.
The prevailing view is that Huang will not be ousted as CEO, but that a seismic shift across the AI industry is inevitable.
Huang earlier admitted to the affair and apologized in an email to employees. The board launched an independent investigation but stressed that “there is no reason to believe that NVIDIA secrets, rather than national security information, were leaked.”
The person with whom CEO Huang had the affair is an executive at Megaspeed International, a Singapore-based data center company. The company is under investigation by U.S. authorities on suspicion of smuggling NVIDIA chips into China.

Patrick Moorhead, CEO of Moore Insights & Strategy, told Yahoo Finance that Huang was unlikely to be ousted unless the board’s investigation uncovered something new.
Moorhead said, “Jensen is a product strategist, one of the closest confidants of the hyperscalers, and the face representing the company in Washington and Beijing,” adding, “This scandal only puts his role as the company’s face in the United States and China at risk.”
Matt Bryson, an analyst at Wedbush, also noted in an analysis note that, based on the board’s initial statement, it seemed unlikely to be planning to oust Jensen Huang as CEO. He explained that removing him would inevitably have a seriously negative impact on the company because of his “hands-on” approach to everything.

Bryson nevertheless said damage to CEO Huang’s credibility was inevitable as a result of the scandal.
He said, “Regardless of the investigation’s findings, Jensen will inevitably lose some of his influence and credibility with the U.S. government and the AI industry,” adding that “his voice on free trade with foreign companies or government regulation of AI could be weakened.”
Jordan Klein, an analyst at Mizuho, said in an analysis note that the earnings announcement on the 17th would be affected by the scandal. However, he forecast that it would have little long-term impact unless new facts emerged.
Klein said, “Significant risks concerning Jensen Huang and his position as CEO can no longer be entirely ruled out,” noting that “he is extraordinarily important to NVIDIA and the industry as a whole.” Klein nevertheless stressed, “If this investigation uncovers no serious wrongdoing or crime, he is likely to remain CEO,” and “nothing will change about [NVIDIA’s] future.”
Some analysts also say that the U.S. administration could step up its scrutiny of NVIDIA.
Stacy Rasgon, an analyst at Bernstein, said NVIDIA could face a double blow. Rasgon said the company would face pressure from a sizable number of China hawks in Congress as well as from Democrats, who are set to become the majority party next January. In particular, he said, Democrats disapprove of Jensen Huang’s close relationship with President Donald Trump and the achievements he has made over the past two years.
In an analysis note, Rasgon said NVIDIA would not be hurt by demand for AI chips, but that it was increasingly likely to face stringent regulation in an environment where AI buildout is becoming a political issue, putting the company at the center of the debate.

[email protected] Song Gyeong-jae Reporter