How the world became too reliant on Jensen Huang

{"text":[[{"start":5.76,"text":"A wayward chief executive is a major problem for any company. The scandal unfolding at the top of Nvidia, though, is a liability for a much broader set of people. It’s a good moment to think about how to make the world less dependent on the fortunes and foibles of Jensen Huang."}],[{"start":19.643,"text":"The Nvidia chief said on Sunday that he had been unfaithful to his wife, following reports that a woman with whom he had relations may have been a Chinese intelligence asset. Given the value of Nvidia’s intellectual property and the fraught nature of US-China politics, this raises countless questions that a board probe, assisted by outside lawyers, will have to investigate."}],[{"start":41.471,"text":"Whatever they find, it is undeniable that Nvidia without Huang as its CEO would have a problem. He is already spread thin, overseeing about 60 direct reports, with no obvious successor. And the company’s board is not exactly robust. Its directors have an average tenure of 18 years, more than twice the S&P 500 mean, according to consulting firm Spencer Stuart. Five of them have served for roughly three decades, with no apparent resistance from shareholders."}],[{"start":71.3,"text":"What hurts Nvidia hurts the market because of its sheer size. The $4.5tn company makes up nearly 7 per cent of the S&P 500. But Huang’s empire has also underwritten growth at many of its customers, taking stakes, backstopping loans and financing data centre builders who in turn host AI labs such as OpenAI and Anthropic. Huang was a cheerleader when tech investors lost their nerve — most recently during the so-called SaaSpocalypse software sell-off."}],[{"start":null,"text":"

"}],[{"start":100.24,"text":"Fortunately there are plenty of templates for reducing dependency on a CEO. Companies such as Morgan Stanley, Amazon and Apple made successful chiefs into chairs while successors found their footing. Look too at Google DeepMind founder Demis Hassabis, who just stepped back from his role as CEO to instead become chair, giving him more space to think about the AI big picture."}],[{"start":123.04,"text":"Even if Nvidia isn’t prepared to countenance Huang leaving his CEO post, many companies have de facto number-two spots — presidents and chief operating officers, say — that ensure investors know there’s someone on hand if the boss collides with a bus. Nvidia should do that too."}],[{"start":139.114,"text":"It’s also time to think about whether the oversight foisted on banks — long regarded as essential social infrastructure — should apply to big tech companies. Lenders such as JPMorgan, with regulators breathing down their necks, have no choice but to build in contingency plans. Nvidia is nowhere near as complicated as a Wall Street bank, but it is becoming similarly systemic. It would not be a surprise to see that on the new Congress’s agenda in 2027."}],[{"start":167.6,"text":"Investors already seem to be contemplating a less Nvidia-centric world. Shares in rival AMD rose 12 per cent on Monday; upstart chipmaker Cerebras was up 5 per cent. Customers move more slowly than markets, but Huang’s slip-up gives them, too, a prod. Whatever the consequences, his predicament is a helpful reminder that a single point of failure is never a good thing."}],[{"start":195.04,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794292949_4493.mp3"}