Key Points
Nvidia's board accepted Jensen Huang's resignation as president, CEO, and director, and named CFO Colette Kress interim CEO while she keeps her regular duties.
Kress has been CFO since September 2013, a stretch in which annual sales grew from $4.28 billion to $215.9 billion.
The board now has to decide whether a finance background is the right fit to replace an engineer at heart, with analysts floating internal engineers like Ian Buck and Bill Dally.
After nearly 34 years at the helm of Nvidia Corporation (NASDAQ:NVDA), Jensen Huang is out. The company announced this morning that its board accepted Huang's resignation as president, CEO, and director, and named Chief Financial Officer Colette Kress interim CEO while retaining her regular duties.
Shares were down as much as 14% at one point today as the market tries to figure out what Nvidia looks like without the only CEO it's ever had. Here's what we know about the newly appointed CEO and the latest developments in the scandal that forced Huang out.
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Who is Colette Kress, Nvidia's interim CEO?
Kress joined Nvidia as CFO in September 2013, having worked in tech finance for nearly 25 years at the time, so she has a wealth of experience within and without Nvidia.
She started her career with eight years at the chipmaker Texas Instruments (NASDAQ:TXN), then spent 13 years at Microsoft (NASDAQ:MSFT), including four as CFO of its Server and Tools division -- a unit that sold data-center software to companies. After leaving the tech giant, she worked for about three years at Cisco Systems (NASDAQ:CSCO) in a senior finance role.
Her long tenure as Nvidia's CFO saw the company grow from annual sales of $4.28 billion in the fiscal year before she joined to $215.9 billion in Nvidia's last full year. She's undoubtedly played an integral role in the firm's success and, next to Huang, has been the main voice on earnings calls along the way.
The company's new (and first) Chairman of the Board, Harvey Jones, said in this morning's statement that Kress "has helped lead Nvidia through a period of extraordinary growth and has a deep understanding of our business, customers, operations and financial position."
Image source: Nvidia.
It's clear that Colette Kress is experienced and capable; the question the board now has to consider as it looks to choose a permanent replacement for Jensen Huang is whether a finance background is the right fit for the job. Huang was deeply technical -- an engineer at heart -- and that has been fundamental to the company's success so far.
Analysts are floating internal engineers as alternatives for a permanent replacement like Ian Buck and Chief Scientist Bill Dally. For what it's worth, the prediction market Kalshi has Buck as the current frontrunner.
A timeline: how Jensen Huang's exit unfolded
Here's a streamlined timeline of the events that led to Huang's ouster:
- Oct. 29: The New York Times (NYSE:NYT) reports that U.S. intelligence agencies surveilled Alice Huang, a Megaspeed executive, as a possible Chinese intelligence asset. Nvidia pushes back, saying Megaspeed is just a normal regional cloud customer and there is nothing unusual about Jensen Huang's relationship with Alice Huang.
- Nov. 5: Three House committee chairs ask Jensen Huang for a closed-door briefing on his ties to the Megaspeed executive.
- Nov. 8: Huang emails Nvidia staff and admits that he "was unfaithful to [his] wife." The board opens an investigation.
- Nov. 9: A shareholder sues, alleging that investors were misled.
- Nov. 10: The board hires former acting U.S. Attorney Joon Kim and the law firm Wachtell Lipton to run the investigation.
- Nov. 11: The Times reports a second alleged affair, this time with one of Jensen Huang's direct reports, Kimberly Powell. The board meets that evening and accepts his resignation.
- Nov. 12: Nvidia officially announces Jensen Huang's exit.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems, Microsoft, Nvidia, Texas Instruments, and The New York Times Co. The Motley Fool has a disclosure policy.