Jensen Huang Ousted by Nvidia Board as CEO

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1:43Mandeep Singh: This is the Bloomberg Surveillance Podcast. Catch us live weekdays at 7 a.m. Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube. Mr. Wong is out as CEO. The chief financial officer I mentioned earlier, Khaled Kress, is named the interim CEO. Mr. Jensen Wong resigns effective immediately. The whole series here. We are advantaged to have with us now Mandeep Singh with Anna Raghurana coming up here in a bit. Mandeep, this is a first step in this crisis for NVIDIA. The next step must be to find an operating CEO, right?

2:32Yes, and it sounds like the CFO, Colette Kress, is going to be the interim CEO, but I wouldn't be surprised if they take much longer in terms of the CEO search and have Colette kind of take care of things for maybe, you know, one or two quarters. And it will be hard for anyone to fill Jensen's shoes, given his role at the company and what he has done. But there are a lot of names that we have heard, and it will be interesting to see if they go for an internal or an external candidate in terms of the final CEO pick. Mandeep, I think what a lot of our listeners and viewers kind of understand about AI is that so many of these deals between chip makers, hyperscalers, software, hardware, there's so many deals that are intra-company deals, circular deals, if you will.

3:32And many of those deals, many of those relationships have Jensen Wang as the centerpiece here. How does that play out going forward? I mean, it just seems like it's going to be so difficult. It will be difficult for anyone, even if it's an internal candidate to, you know, kind of manage all the relationships in terms of the ecosystem that Jensen had created. And I think that's where, you know, anyone stepping in new may have their own way of going about things, you know, on the product side as well as the financing side that you alluded to. Tell me with the GPU, folks, Mandeep Singh, we underplay it.

4:17We ask him dumb questions. He is incredibly good at the electrical engineering and computer science on this. What is the skill set to go from GPU chip whatever to the next GPU chip? Is that a Mandeep Singh engineering decision? Is it a guesstimate about the depreciation of the older chip? How does that work? Yeah, look, I mean, what NVIDIA has done is they have launched, you know, new versions of their chips almost at a six-month cadence. And we are talking about, you know, their latest Vera Rubin architecture, which is, you know, five times better in terms of throughput than their Blackwell architecture.

5:03So to be able to iterate on these things and stay ahead of everyone else, which is why they had such a big share in the GPU market, is very commendable in terms of execution. But that's where, you know, if it's someone technical, it will make a difference in terms of how they approach the product side of things. Have you met Harvey Jones, the new chair? I mean, And the dominant feature there is he's one of, I believe, off the Bloomberg Bandeep, four original directors. I mean, do you have any perspective of Mr. Jones' relationship with Mr. Wang and with the rest of the team? Yeah, I mean, look, I think when it comes to the board and, you know, the new chair, where obviously, you know, everyone is very close to Jensen, given he's the co-founder and, you know, has been with the company for over 30 plus years.

6:01So from that perspective, I think, I don't know Harvey in particular, but at the same time, I think it would be somebody who Jensen knows quite well. I look, Mandeep, at the product cycle. Ian Buck seems to be incredibly important here. He is the Stanford technologist behind the moment here. How important is position now and what does Ian Buck need to do in the coming days? Yes, so he's definitely the front-runner when it comes to internal candidates and clearly he is the guy with the CUDA aspect of the Bloomberg product lineup, which is why, sorry, the NVIDIA lineup, which is why NVIDIA has done so well.

6:50And from that perspective, you know, having someone technical will be quite beneficial at this point of time to calm down all the anxiety that investors have. And Mandeep underplays the ginormous technology feat of Ian Buck. This was Brooke, B-R-O-O-K, at Stanford that then went over to CUDA, C-U-D-A, which Mandip will explain to me over a beverage of my choice at some point. And then you bring that over to the miracle that is NVIDIA. Mandip, what is your experience of beast technology people, quite frankly, like you with great respect, running as a CEO company? Can that actually work? Well, what Jensen was really good at was he was both very good on the technology side and also great in terms of that ecosystem that he had created and the supply chain aspect of it.

7:52And that's a hard combination to find in terms of at the CEO level. So clearly, Ian has all the credentials when it comes to the technology side of the NVIDIA products. But I think to have those kind of relationships with TSMC and all the suppliers, which is why Nvidia got to this position in terms of ramping up capacity so fast. I think that will be a true test of somebody who has got, you know, all the different aspects of what is needed for this company. Mandeep Singh, thank you so much. Greatly appreciate it this morning. I'm sure I have a long and hellacious day. It is widely understood at Bloomberg that they can't be on the same airplane.

8:34They can't even be in the same room. Anarag Rana in Chicago, as we have Mandeep Singh in New York, and we're thrilled that Anarag could join us here for years at KeyBank and driving all of technology at Bloomberg. He is our definitive force on cloud. What is the challenge here, Anarag, in the relationships with all the people that buy these chips for data centers, et cetera? Do you have to get out and sell it? as Mandeep was talking about? Or do they even get an interregulum of 30 days? Yeah, I think the biggest thing is going to be, you know, NVIDIA has had a very massive, you could say, gap between the others when it comes to AI accelerators.

9:19But this is the chance for the others to catch up, you know, whether that's Amazon or Microsoft or Google can close the gap and say, well, why am I paying so much money to NVIDIA for those chips when I can have my own? And so far, they are forced to buy those chips because that's what the customers demand. That is the best in the business. But if this gives them a little bit of a chance to catch up, I think this could be good for the Hyperscape cloud providers. Anurag, you've covered Apple forever. As I think about the impossible task of filling the shoes of Jensen Wong, one of the names I think of is Tim Cook.

9:56Talk to us about that. Oh, you are such a beast. Yeah, I thought about that as well. Oh, come on. it would make it would be who would play tim cook in the movie no i don't know richard gear that would be anorak continue on tim cook yeah i think you know one of the biggest thing is they just did the transition the ceo is very young he and and tim said he's going to be chairman for a while he's going to make sure that he navigates the political headwinds or the political currents both in China and the U.S. I feel very, I'll be surprised if he takes off the responsibility of ensuring that Apple's in a great hand before leaving Apple.

10:36But to be honest, you don't know at this point. Can I impress Anirag with my vast knowledge? Okay, Anirag, I know you're big on Microsoft and them as a holistic Mag 7 future. So they have Azure Maya, M-A-I-A, I'm probably pronouncing it wrong. and they're going to go from Maya 200 out to their newest Maya 300. NVIDIA has that same analog, right? Who's going to make the decision on the next Maya 300 at NVIDIA? Yeah, the thing is that I think is the biggest question because as Mandeep was saying, NVIDIA has done a phenomenal job of going from one generation to the other in a very short period of time.

11:17And the gap they have with, let's say, Maya. Now, Microsoft has had Maya for years. But to be honest, nobody's rushing out and buying that capacity on that chip. And Microsoft has to be forced to go out and buy NVIDIA chips. If we see some shortening of that innovation curve, you could see down the road that people are using training or inference on Microsoft's buyer chips. We've already seen that with Amazon. Amazon chips are in demand by customers. And Google's obviously far ahead in that game. and they are trying to come up with their own systems by the end of next year. So they are already in the market.

11:54So I think the competition is going to get very tough over the next few years. You say who's ahead, who's behind. I think if we were to do the math right now, Anvidia being number one in terms of technology, then Google, then Amazon, and then Microsoft. And my math is only driven by what the customer demand is. If the customer is not demanding big Maya workloads for their inference and training, then I think they are behind. But Microsoft has started to change their own internal first-party apps with Maya chips, which means if you are running Copilot or, for that matter, any other app that runs AI workloads, they are slowly moving it in the background before the customers get comfortable with it.

12:39I'm Anna Raghana with us, folks. Across America and worldwide, the shock of a resignation at NVIDIA by Jensen Wang. An interim CEO announced the chief financial officer and a new chair of the board, Harvey C. Jones, who's been on the board since, I believe, 1993 as well. We are advantaged with the expertise of Mandeep Singh and now Anarag Rana. And I just want to point out, Paul, that when Anarag says he's doing the math, it's not our math. I walked by his whiteboard in Chicago one day and it was matrix algebra in the eigen space. Exactly. I mean, it was painful. Stock. I'm just looking at India stock here.

13:22It was down about 7 percent when the news broke. It traded down even more. We're down a little more than 10 percent now in the pre-market. trading for NVIDIA. Anurag, when I think about key man risk out there, just in general, I think Elon Musk, certainly with all of his companies, but right there is Jensen Wong here. He is central, it just seems like, I'm not sure if it's really the case, but it seems like he's central to every single deal that happens in the AI space. How does that stop on a dime? I can't, I mean, How does that play out? Paul, I feel the exact same thing, to be honest, because look at the entire NeoCloud space.

14:04They are all there because they know at the back of it, Jensen's there to do the backstop if something bad happens. Now, to their advantage, the last two things that have happened, as Nebbi just reported right now, and we had Corviva a couple of days ago, they've started to ask for prepayments. So that's a good thing for them, frankly. Oracle did the same thing. But you are absolutely right. The entire AI trade, as much as it's related to the U.S.-related assets, it's all backstopped by Jensen. So we're going to see a big, big vacuum in this thing. And to be honest, maybe things slows down. And sometimes it's not a bad thing because that would give some time to digest what's happening.

14:41Free cash flow gets positive again. Maybe CapEx gets pushed out. But maybe that's not a bad thing. And one final question here as we stagger through the morning here. And we haven't talked about this. Paul alluded to it once, all of the interdependencies, cross-ownerships of transactions and combinations involved here, they do center around Jensen Wang because everybody needs NVIDIA. What happens to that matrix this morning? Yeah, you're absolutely right. It's that ecosystem that's getting shaken up. But guess what ecosystem is not getting shaken up? The one that's around Google, one that's around Amazon, and then what's around Microsoft.

15:26These three companies are forced to buy NVIDIA chips. But if they can prove to the market that they can run some workloads on their own chips, I think that changes the equation altogether. Can they do that? I've got to get out. Mac blocks, I'm saying. I've got to get out ahead of this. Anirag Rana, do they have the ability right now to say, look at this, you need stability, buy Amazon, buy Microsoft Silicon? I think Google's already there, to be honest. Google TPU is doing very well, and Amazon's done a very good job with their Tranium chips. So it's the third person is Microsoft. And from what we have heard, the Maya 300, when it comes out, it should be at par with at least doing the base level stuff that what people are looking for.

16:09So it's time for them to gain market share if we do see some kind of delays in the tech curve of Nvidia chips. I mean, we'll just have to, this is just too much. Anarag Rana, thank you so much. You got to go. He's going to Travelle at the Langham. Oh, is that right? That's the power breakfast in Chicago. Very good. He's got his own table and the whole thing. Anarag Rana, thank you. Thank you so much here. Stay with us. More from Bloomberg Surveillance coming up after this. If you invest, lead a business, or allocate capital, one-sided views aren't enough. Join me, Brad Rogoff, the Global Head of Research at Barclays, on the Flipside podcast.

16:51Each month, I go head-to-head with one of our expert analysts on my global team to debate the economic and market issues that matter most. From inflation and AI to equity and credit trends, each debate helps you see what headlines might miss. Find the Flipside wherever you get your podcasts.

17:10Mandeep Singh: Running a small business takes everything you've got. But with Chase for Business, you're not alone. They bring together local support and a broad range of resources to more than 7 million customers. With a deep understanding of your day-to-day needs, they provide products and guidance built to help you thrive. Right now, earn$500 when you open a new Chase Business Complete Checking account for new business checking customers with qualifying activities. Offer expires January 21st, 2027. Chase Business Complete Checking has the flexible tools you need to accept payments, make deposits, and manage your finances with confidence.

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18:14Mandeep Singh: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Joining us from London now, sort of on the bringing in the financial, along with the imagery that he covers with WPP and Omicron in that. Matt, finesse for me the image disaster. Total train wreck of NVIDIA. how do they pick up the pieces of an image without Jensen Wang? Yeah, it's a tall order, but, you know, I guess the most important place is where you start. And, you know, they've started by, you know, cutting ties with him.

18:59So that's kind of a really important move for them. But, you know, there's still, I think, probably a lot of chapters of this story to play out. You know, we've not really talked so much, I don't think, yet about what the U.S. investigations could be. and there's a number of predecessors that I can think of. And the one at the forefront of my mind is Ericsson that ended up with a deferred prosecution agreement and big fines because of breaking US international kind of trade laws a few years back. So things like that could still be coming down the line for NVIDIA. So it's going to be a very, very busy, busy time for them on a number of funds, reassuring customers, talking to the U.S.

19:45government, trying to hold back this wave of competitors that you were just talking to Anurag about. One name that wasn't mentioned there was SpaceX and Tesla with their TerraFab, who are also trying to create capacity. So, you know, there's a lot. It's a big, big challenge. You know, I'm probably like a lot of people, Tom, our listeners and viewers. We don't know who this collect crest is. So what do you do on the Bloomer Terminal? go bio collect crest and i see that she's got a lot of experience in the tech space but there are 1600 other people who use the bio function to figure out who collect crest is uh matt talk to us about visibility for the business of nvidia here as it deals with this uncertainty here um how much visibility do they have on their revenue stream for the coming quarters i think a lot I've been probably visibility through 2027, possibly even into 2028, because the industry has been thinking two or three, maybe four or five steps ahead for quite some time now.

20:47When you hear the likes of TSMC and Micron and the kind of Semi's names all talk about being sold out for at least the next 12 months, that's because people have got orders in the pipes with NVIDIA. So I think for now, the business kind of hums along. It's probably more those kind of two to three year kind of orders. And as you also mentioned, these kind of investments that they've made across companies, were they backed by just Jensen or was there consensus within the organization about funding those startups? A cross section of people today that we speak to within and outside Bloomberg on this historic moment for technology.

21:31And I really mean that I think of Chip Ward, my book of the summer. I think it was three years ago. This is truly an historic day for technology. Everybody has a different skill set. Matt Bloxham, folks, brilliantly pulls together razor-sharp financials. He's a CFA with sort of the imagery, the structure, the grind of it. Matt Bloxham, I'm counting 82 sell-side analysts on NVIDIA. They're sitting in an office right now with their head of research, and importantly, their head of compliance about, okay, what do we do? How does that process work?

22:14Very differently, I think, at different banks, depending on the jurisdiction and their size. Some analysts just end up with a huge amount of freedom to largely write what they want and take personal responsibility for what's out there. You look at some of the big bulge brackets. It's a tricky process. And you may well find that people are sitting there frustrated right now that the research they want to put out is not going out or it's going out without the real kind of cutting angle that they want to give. So it's, yeah, it can be a frustrating back and forward for sure when you're in that seat.

22:511, 2, 3, 4, 5, 6, 7, 8, 9, 10. It's too many numbers to count at 9, 12 a.m. I'm going to say 14 changes of opinion today. Yeah. Or reaffirmations of opinion just in the Bloomberg. Matthew, give our listeners and viewers kind of a sense of just Jensen Wong and how does he get deals done? How much is Jensen versus NVIDIA? I mean, because some people are trying to just get a sense of how important this guy is to this company. Yeah, I mean, I think you have to say that NVIDIA really is Jensen Huang. And that may feel like a bit of disservice to all the people in that company that make it work. But clearly, he's co-founder and he's kind of recreated that company into the AI powerhouse that it is.

23:40So I think, you know, everything they've done in the last two or three years, really, I think has been inspired by him and his own personal energy and insight and creativity and, you know, expertise in the industry and his ability to kind of create personal relationships with the most important people in the world, both in politics and in business and really drive those deals through. Before we let you go. I think it's going to be super interesting to see what he does next. Matt, before we let you go, within the blur that we're dealing with right now, futures negative 53, the arch issue here, and I see it like in the Financial Times, the Telegraph, all the other British papers, is this technology insecurity within the United Kingdom.

24:31which I don't get because I know the Cambridge math and I really, really know the imperial math. You know, our folks are definitive quantitative finance program, arguably worldwide. Matt Bloxham, how does the United Kingdom get its technology act together? Yeah, well, like a really tricky question. I think that the UK needs to kind of have a clear view of the role it wants to play in the global technology market. And once it's made that decision, really back it with a combination of funding, tax incentives and policy that really kind of allows companies to kind of build on that platform and to encourage inward investment into the UK.

25:23and then you start to get into all the geopolitical issues around how has Brexit impacted that. But the clarity needs to start with what is the role that this country wants to play in the global technology industry and everything should flow from there. Thank you so much Matt Bloxam. Greatly, greatly appreciate it. Stay with us. More from Bloomberg surveillance coming up after this.

25:55Mandeep Singh: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. He is the dean of technology. The only one I can think of is Rick Sherlin, which would be close. Ted Mortensen joins us now with Baird. Mr. Mortensen, thank you so much for joining us this morning. What did Jensen Wang do with silicon that no one else did before him? He's been three years ahead of anybody in the industry, both from a system standpoint, and that would be not only silicon, but networking and the access to memory.

26:39What he's put out with Vera Rubin is probably the biggest advance in compute technology in history. So not only is he the architect of NVIDIA, but he's also really the superintelligence lead and the capital allocator and the political face of AI into Washington. So what he has done in the last decade will go down in history as one of the greatest CEOs X of this this news. Ted, what is the company do now, given that he has stepped down here? I mean, I can't even imagine trying to fill those shoes. How does this proceed here, do you think? They have to appoint somebody at the CEO level that is recognized by the buy side as a luminary, an expert in superintelligence, and who has a pedigree similar like some of the deep mind guys.

27:54This is a very coveted job. I bet there's a bunch of people being contacted right now, but they've got to put an A++ player in the seat. I look at this and it just screams to me of, you know, different candidates. Is Marissa Myers with her operational research at Stanford, is she more CEO McKinsey like to take that position wrapped around Ian Buck doing the engineering? I tell you, if I had one guy that I'd put in the seat, Demis Hassabis from DeepMind. mind. I mean, that's the kind of individual. There has to be a technology mind involved in the CEO position. Not a person that is consultant, not a person from an adjacent industry.

28:48This has got to be a technology appointment. What does Jensen Wong do now? I mean, he is central to this whole thing. It's not just his seat. It was him. I'm not sure what he does now? Well, you know, I think he's going to be mired in investigation for months upon months. And my heart goes out to him because we're all human, right? And everybody makes a mistake here and there. And I hope that he just didn't walk into a buzzsaw. I mean, you know, if he got into a bad situation and it's blowing up like an atomic bomb, there's nothing he can do. What I'm most worried is anything that has espionage around it, we're now in a different zip code.

29:40We're in a criminal zip code. And nobody can avoid that, especially with the change in the political landscape that we saw post the midterm. Well, we've got a time constraint with you. We're so happy that you could join us this morning. But let me get this finally in. And I want to go back to Sir Dennis, of course. I mentioned earlier, Ted, the academics of Imperial College and the University of Cambridge. Dennis is arguably the greatest British export of technology. I would suggest as a founder of Google Gemini, he's more software-based. How does he handle the silicon and the cards of NVIDIA, does he bolt that onto his abilities or does he have to learn that in real time?

30:27The people at NVIDIA have a hardware pedigree, so that's not a problem. It's just somebody that has to tie both the hardware and the software stack together. And I think talking to clients, they are looking, I mean, NVIDIA has a 6.6 % weighting in the S &P and NASDAQ. I can tell you after conversations last night, all the portfolio managers need to see that A-plus player, and it's got to be relatively quick. Competitive threats here, how vulnerable is NVIDIA right now? I think they're vulnerable on price and gross margin because to maintain price, I think they're going to see price concessions.

31:08They're going to have to give price concessions to some customers. I think, obviously, AMD ad nauseum has been talked about the last two days. They're in the catbird seat. Broadcom should get some business. I would say some of my clients are really looking at Google on the TPU side, AWS on Tranium side, Marvell, Celestica, a bunch of names. you're going to see portfolio managers reduce their way overweight positions on the index side, and they're going to spread out risk. This has been wonderful, Ted. Wonderful to see you in the blur of your bared day. Ted Mortensen, definitive in American technology.

31:58Stay with us. More from Bloomberg Surveillance coming up after this.

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34:02Mandeep Singh: You're listening to the Bloomberg Surveillance Podcast. Catch us live weekday afternoons from 7 to 10 a.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. An economic story with Anna Wong is always wonderful with Bloomberg U.S. Economics. Eight ways to go here, but we must look at our technology. It's part of our nominal GDP boom, this moment that the haves and have-nots of America are living. Dr. Wang, the economic impact of this crisis at NVIDIA. Yes.

34:39Anna Wong: One way to think about this is to ask ourselves, what if this Nvidia shock becomes more of a given other impulse to this AI sell-off and leading to a broader equity correction? So if you simulate the shock in the FEDS-FERBUS general equilibrium model, so suppose that S &P 500 fall by another 20 percent. So we found that it will roughly subtract one percentage point to GDP. it will barely do anything to inflation because typically equity price correction just do not just not just equity but any demand shock just do not really move the dial on inflation unemployment rate will rise by roughly 0.5 percent point in the next year so that pushes If the baseline is 4.2 percent on the street, then that could push it to 4.7 percent.

35:42Anna Wong: And the mechanism of all this is primarily through the consumer wealth channel, right? So currently about 40 percent of household net worth is tied to equity. So when you have an equity correction like this, it could affect the GDP consumption through that channel. But I think the risk for this particular time that we are living in is that it could be a bigger impact because the Fed is not going to react. So even in the Fed's own model, it says the Fed should be reducing rates by 50 bps. But right now the Fed is thinking about or Chris Waller is talking about raising rates by 50 bps. So it actually removed this very powerful offsetting channel against these drag on the economy.

36:35Anna Wong: And so if the Fed, if the equity correction would not do anything to inflation and the Fed is on track to not hike, as the SEP says, or even hike by 80 bps, as the WRP or the future suggests, then the GDP could be even larger at, you know, 1.5 percentage point, basically reducing GDP to zero. Have you ever heard Anna Wong this gloomy? I have never heard it. Paul, save the interview. Anna, so talk to us just about, you know, we got some inflation data here. Talk to us about your thoughts of underlying inflation here. We do have crude oil that's been coming down over the past several days, but still there's that underlying what a lot of people call sticky inflation.

37:19Talk to us about that. Yeah.

37:21Anna Wong: So, Paul, inflation truly is a very complex subject as there's so much detail to look at. So, as a result, we constructed the Bloomberg Price Project, which looks at millions of prices each month, right? And what it's saying is that the headline inflation is actually stronger than BLS is saying. So BLS numbers would imply that year-over-year inflation is probably growing at 3.9 percent. But our Bloomberg Price project says it's 4.6 percent. But it also says, our project also says the underlying pace of inflation is not as broad-based as the BLS number suggests. So once you trim the outliers, we are actually at 2.3 percent for underlying inflation.

38:11Anna Wong: And core is at roughly 2.5 percent. So I think the Fed is in a tough place here because on one hand, you just can't ignore the really strong headline number. And people are feeling the inflation squeeze from the strong headline number. But on the other hand, the underlying is not showing much of the broadening. Anna, thank you so much. Anna Wong, really, really appreciate it this morning. Dr. Wong driving all of our U.S. economics, and particularly to the December 9th meeting as well. It is on, and I hope I'm going to get this pronunciation right. Ed Ludlow is there three and four times a week.

38:51It is Berryessa Road, San Jose, California. And there's a Denny's with a plaque, and I think it's table four. This is where Jensen and the Nvidia clan hung out and invented it all. We are thrilled with Ted Mortensen just on with us, with all of his decades of experience, truly in the trenches on this day of today. Ed Ludlow joins us with Bloomberg Technology. Ed Ludlow, how will the employees, 40-some thousand of Nvidia, how will they respond to this moment?

39:27Ed Ludlow: I spoke to several of them yesterday. You know, it was Veterans Day yesterday, right? So to take you inside that building at NVIDIA HQ, it was a holiday for most staff. And as one engineer put it to me, he said, I don't want to log on because I don't want to face what is out there, you know, in the reporting at that time. Now there is confirmation. Jensen Wong has resigned as CEO. Colette Kress, who is very familiar to Wall Street, very familiar, is interim CEO. and they've made these adjustments to the board. But yeah, you know, the way that Jensen ran that business, it was structured so deliberately where he had like 60 direct reports and then the tens of thousands of people underneath that.

40:13Ed Ludlow: And it worked, you know, it worked that way. But I think many people are in shock, even though Sunday, this past Sunday, Jensen Wang had communicated to all staff what had taken place. So, Ed, we were just talking with Ted Mortensen, a tech analyst at Baird, and he made the really strong comment that what the company needs right now in terms of a successor is a very, very well-respected tech leader as opposed to maybe a Wall Street type of hire. Yeah. What are you hearing out there in the Valley? Well, look, I mean, Colette Kress is CEO on an interim basis. And in the statement, the board was clear that they will review external candidates.

40:55Ed Ludlow: And in the media reports that we have, the external candidates are technology people. One of them is Arm CEO Rene Haas, who you guys will be familiar with. But he was at NVIDIA for seven years. 2006, he ran the compute business. He knows the semiconductor industry. NVIDIA's systems are based on Arm architecture. So people see that as a likely frontrunner. There are several names out there. And internally, Ian Buck. Did I hear Tom say the name Ian Buck? Did I miss hear that? And we're pretending it's Bloomberg technology. I've nailed the board this morning. I mean, continue. Super smart. You know, Ian led the team that wrote the CUDA software language.

41:36Ed Ludlow: That is the software that allows GPUs to be used for AI training and inference. And he has been there for a long time and is essentially a co-founder. And maybe, you know, he lacks the characteristics that Jensen Wong has. But people talk about him, too. OK, but to help me here, because Ted Mortensen brought this up, I guess that my puny brain would have picked it up at some point. But Mortensen out front of Ludlow, out front of Keane in Sweden, the combination of Sir Demis Hassabis, Nobel laureate in chemistry, Google DeepMind and the rest, founder of Google Gemini, arguably the combination of Sir Demis.

42:16and Ian Buck sounds like a rapid solution. Am I off the mark?

42:24Ed Ludlow: Well, any great software and hardware combination will be talked about until it's confirmed right. You're not off the mark. I mean, increasingly, NVIDIA has accrued incredible software talent anyway. And what I would say in answer to your question is the 60 people that reported directly into Jensen Wang, including astonishing experience and talent in the domains of AI models and in the compute that powers them. There's no shortage of that. But I would also just say, remember recent reporting that Demis Asabes was frozen out at Google DeepMind for a wide range of reasons. Okay. And this question comes in, I mean, it's 22 degrees this weekend in Stillwater, Minnesota.

43:08Oh, boy. Yeah. I mean, winter is upon us here. Stephen Stillwater does a compare, contrast. And you're perfect for this. Mr. Wang, as compared to Steve Jobs, the impact of jobs on Apple, I guess they did OK. And then Wang, give us your take here on a rational comparison of jobs and Wang.

43:33Ed Ludlow: so uh both engineers you know that's really important uh unique style and approach um steve jobs the turtleneck as you if you're watching this show right now on youtube as you see on the screen nvidia the leather jacket of jensen wang um but i think you know the the main point of difference that i would flag to you is that jensen wang made a fundamental change in how the semiconductor industry works. Historically, you don't just walk into the NVIDIA store, pick up a bag of chips and walk out. It never worked like that. You go through a middleman and that middleman was Dell or it was HPE or it was Supermicro.

44:14Ed Ludlow: There was no business of Jensen flying around the world selling chips to everyone. It just doesn't work that way. And it didn't, but he made it so. Very different business model. And that now going forward will be interesting because he has the role of being the face of the company, but also the relationships with the president of the United States, the leaders in Southeast Asia, and the CEOs of all the companies. You know who the first, well, I don't want to get in trouble. The first people I heard from last night when the reports came out about the board looking at housing Jensen Wang were the leaders of the companies he does business with, you know, before we really heard anything from NVIDIA at all.

44:52Ed Ludlow: I think that says a lot. Ed, you're not going to get in trouble. No one listens to Bloomberg surveillance. No one watches this on YouTube. So you're not going to get in trouble. Paul Sweeney with Bloomberg Technologies, Ed Ludlow. Ed, give us a sense of how integral Mr. Jensen was to getting all of these deals. A lot of people refer to them as circular deals with all these technology companies. How much of it was Jensen Wang himself personally versus I got to do business with NVIDIA because they're just the biggest. best out there? I think that there's an element of both, but Jensen Wang was very directly involved in many of the transactions that NVIDIA does.

45:34Ed Ludlow: One thing I'd point out to the audience that I had to remind myself of quite recently is NVIDIA has an investment arm, Nventures, NVIDIA Ventures. And those guys are like a team of very capable people. Think about them as like, you know, your business development team, your M &A guys. And they were busy, like they were out there They're thinking about all of this. But, you know, Jensen Huang was very consistent on pushing back against the circular financing thing as a bad problem, as an issue. You know, the way that he looked at it is that NVIDIA has lots of capital. They're throwing off cash, as you know.

46:07Ed Ludlow: You and I have talked about that very regularly. What does NVIDIA do with all the cash? And these companies that are relatively small right through to some of their giant partners needed liquidity, essentially, to grease the wheels, to buy, compute, and install it. And the way that Jensen Wang would always say is that that's no bad thing. It got people to actually move, get stuff done. What has changed now at Amazon, Google, AMD, all the rest of them, is they try to plan out, I'm going to say, Ed, amateurly, a six-month plan. We've had others today say, this is a moment where they can seize the high ground.

46:49Do you buy that?

46:51Ed Ludlow: Well, so one just piece of reporting is that NVIDIA's earnings are going to go ahead next Tuesday, which, you know, I don't think anyone thought they wouldn't. But this change, Jensen Wang resigning immediately and CollectCrest leading the company on an interim basis. Like in the here and now, nothing changes for anyone, including those customers that you just talked about. They were already working on their own chips. They were already trying to diversify away from relying on NVIDIA. and it's highly unlikely that in the next fiscal year, NVIDIA, that the picture changes dramatically. Maybe it will.

47:22Ed Ludlow: It's so hard to calculate. You know, again, I would say it was not CollectCrest, the CFO, making the bold growth predictions. It was often Jensen Wong. So I guess whether they're on the same page or not, we don't know. But yeah, I hope that answers the question. So, Ed, I guess next Wednesday, post-close is going to be must-see conference call with this company reporting earnings here. How do you think they play it here?

47:55Ed Ludlow: Prepared remarks. Do they take questions from the analyst pool? You know, in history, sometimes they don't. Sometimes they do. Or sometimes the IR team will say we will not be taking any further questions on a particular subject. Sometimes legal counsel gets involved. One thing, I think it's actually next Tuesday that they report earnings, which is unusual. Because if you go on Ask B on the Bloomberg terminal, it will tell you that in NVIDIA's history with the Bloomberg data available, it's only reported earnings on a Tuesday 7 % of the time. They always do Wednesday. So that was kind of odd going into it anyway.

48:32You got to dash. Let me do this. I just think it's important. We opened with this iconic Denny's in San Francisco where these NVIDIA geniuses put it all together. When you go to Denny's, Ed, is it the Philly cheesesteak omelet or the T-bone steak and eggs?

48:50Ed Ludlow: T-bone steak and eggs. I'm a big protein guy. It's like, you know, it's full British, full Wales. Yeah. It's like the way they go. Yeah. What are you going to do on this show today, Ed? I can't imagine. You must be blowing it up. I'm going to I'm going to seek I'm going to seek the person that argues fiercely that Jensen should have stayed irrespective of his infidelity. And because there are so many of those people out there, they really there really are. So so there's a scandal here. There's some national security questions. But most people I've spoken to believe that the board should not have done this.

49:23I mean, Alexis, I mean, Ed Ludlow on Entertainment Tonight, I can see I can see it. You know, I actually have a question for Ed. Is it out of the question, Ed, that Wong at some point could be brought on, retained as a consultant to the company so at least investors feel like he has input into the company's future? Well, yeah, he doesn't.

49:43Ed Ludlow: The statement says nothing about that. No advisory role, no chairman emeritus. And one Silicon Valley consideration or actually big global consideration, Jensen doesn't have any massive voting power. He doesn't even have that much economic ownership of the company. So there's no sort of class of shares that give him, you know, the deciding vote. And, you know, that has been the big point of difference with him. See, the control room thought Alexis's question was brilliant. She's a pro. They never say that to me. Ed Ludlow can't wait for Bloomberg technology. Truly, folks, the arc going back to, I'm going to say just after World War II, truly an historic day for American 20th and 21st century technology.

50:25Look to Ed Love, Bloomberg Technology, all of his great work on social as well.

50:32Mandeep Singh: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, 7 to 10 a.m. Eastern, on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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