NVIDIA Succession Crisis, Anthropic IPO and AI Chip Scrutiny 11/13/26

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1:02Thank you very much, Frank. The NASDAQ is tanking again today, but the Dow's just barely negative as the NVIDIA aftershocks work their way through the AI ecosystem. I'm Kelly Evans, and welcome to The Exchange. The NASDAQ down 1.25 % today, still not great. The S &P down three quarters of a percent. The Dow, as I mentioned, only down 79 points. The NeoClouds and the chips are leading the tech declines. CoreWeave and Nebius both lower by close to 10%. AMD and Broadcom are also under pressure as the narrative shifts from NVIDIA's troubles being a positive catalyst to, in fact, more of a headwind.

1:36Both of those names are still up big on the week, 16 % and 17 % respectively. But there's some chatter about if NVIDIA ever had to cut prices, it could pressure their margins and so on and so forth. Big tech mixed. Microsoft off session lows as they work to fully restore the longest service outage in their history. And Apple hitting another fresh high. It's third in a row. It's been, I think they say, the catbird seat lately. On the macro front, PPI not doing anything to change the rate hike path. It's pushing yields higher with the 10-year above 5%. 514 gold for its part below 4 ,000. I think it's negative on the year now.

2:09It's almost negative on a 12-month basis. And Bitcoin at 68 ,000. And just incredible moves there lately. But we begin once again with the story of the, I don't know, year, decade, NVIDIA, down another 3 % as Jensen Wang's resignation does not mean the company's challenges are over. Could be far from it. Our first guest serves on one of the three committees that will hold a closed-door briefing with Jensen Wang as early as next week. New Jersey Democratic Representative Josh Gottheimer joins us in our opening exchange. It's great to have you here, Congressman. Welcome. Thanks for having me. All right.

2:43So what's the timeline? What happens now? Well, actually, yesterday, Congressman Darren LaHood and I, we both oversee the subcommittee that that has jurisdiction here on the Intelligence Committee. You asked yesterday of of the intelligence community, including the CIA and the DNI, as well as the Department of Justice and the FBI. What did you know when we want more facts? We want to understand exactly the timeline here and the information at hand. So I'm hoping we get quick answers there as we lead into Jensen coming to testify. The official response from Jensen has not come in yet. You know, three of the committees that have jurisdiction here asked Jensen to come testify.

3:23We've not heard officially. They threatened yesterday to issue subpoenas to get the information we need. And I think that's the key here. We have to really understand what went on here. You've got chips, very advanced chips that we do not want to get in the hands of China, our top adversary here. And so if they were able to get there, what kind of deals were made? What exactly do they have? And Ms. Wong, what did she allow? What did she give? Is she part of this? Those are all questions we have to understand. You mentioned there are three committees. Does that mean that one of you ends up moving forward or will all three?

3:58Well, I believe Hakeem Jeffries earlier today said that the intelligence community would take the lead. But listen, there's multiple jurisdictions here. I think we all have questions that are relevant for our committees. From an intelligence committee perspective, you can imagine from an AI perspective how important this is for our national security, for our critical infrastructure, and understand when it comes to chip policy, what exactly got to China and did Megaspeed divert chips? You know, that's another big story here, what was diverted. And were there, you know, that's been an investigation that's ongoing of Megaspeed.

4:34You know, certain people in the administration, especially the Commerce Department, was blocking, my understanding is blocking certain restrictions that others in the administration, like the Treasury Secretary, wanted. And I just want to remind the audience, I mean, your tech background makes you especially interesting to speak to here. You worked at Microsoft for years. You know a lot about what's going on. I won't ask you about the Microsoft outage unless, I mean, do you know anything about that, by the way, about what happened there? No, I haven't been there a while. No, I just mean even where you sit in Congress.

5:03No, I haven't heard. In fact, I asked for a briefing on that question. Was there something that went on that's nefarious here or is this just something else? You know, these outages occur in a lot of the companies, but the size of it and the length of it, right? And the timing of it, right? So lots of interesting questions, but what you thought of is exactly what I asked about yesterday. But, you know, going back to NVIDIA stuff, you know, this is a, as you pointed out, a major issue because there's a lot of pieces involved. And the chip piece of this, remember, given the battle we're in with China, you understand why this is such an important thing to understand.

5:42There were some reports on social media from, I think, a former OpenAI employee who was asserting that based on his analysis, that NVIDIA chips were directly, their leading edge chips were directly being used to train Chinese low-cost rivals like DeepSeek. Do you know anything about that? Do you expect us to, what would you say the current state of affairs is? You know, our policy has been to not allow the latest chips to go there, right? To be behind, that's, you know, that's a policy that's continued in this administration, started in the last administration. And given that, I would hope that's actually what's happened.

6:15That's why you have to, the question we should all want to get to the bottom of as part of this, not just what happened between Jensen and Ms. Wong, but to also understand were chips diverted? There's been an ongoing investigation. And you would hope that as part of this, that's not what's happened. Was any technology shared? You know, this is what exactly happened between the two of them. Were there questions asked and answered? and the ranking member of the Intelligence Committee, Jim Himes, was asked about what happened specifically here. And it's still unclear if she was a spy or just unwitting in all this.

6:52And that's still a question as some of what we're trying to get to the bottom of on the Intelligence Committee. I was actually going to ask, I mean, if it turns out that for all of the problems with this relationship and who she was and what her company, that there wasn't kind of direct spying or being an agent of the Chinese intelligence. If that itself is not decisively shown, what then? Does it matter? Or has this revealed enough about sort of some uncomfortable states of affairs that are not in America's interest to be taking place? I mean, a lot of people are now feeling like NVIDIA maybe wasn't doing a great job carrying out the spirit of what the U.S.

7:33was trying to intend by keeping those chips from China. So those are all questions we want answers to. You know, this this brings back to the broader issues here around A.I., which is why, you know, I've advocated for smart guardrails as we move forward and as we head into a new Congress. Chip policy is one of the key questions here, because, as you know, China's not exactly always been in the up and up in terms of going after our IP. and what did they have and what were they able to get. And when you're in a race like this, as you just pointed out, having a little advantage can go a long way.

8:07And so from making sure we're safe, that we're protecting our national security and our critical infrastructure and our cybersecurity, it's really important to make sure that we, both when it comes to models and pre-deployment review, to make sure we have good handles on it from our chip policy and making sure that we're – And, you know, there's been a lot there are a lot of companies, not just NVIDIA, who have cutting edge research. How protected is it, you know, from somebody who wants to walk into one of the other labs and go grab information and get it to the Chinese? We're at a moment right now, just like we were in the nuclear time, right when these little advantages make a huge difference and can affect our national security.

8:45It says here that you had bought some chips, benchmark electronics, applied materials in late October, some AMD earlier than that. Can you talk about those purchases, chip stocks? And I've seen by the way— By the way, no idea. So you know nothing about it? I have an independent trust. I literally have—I handed over the keys of all my investments when I got to Congress. So I don't even know if that's true. I believe I've seen DeSantis pushing for the lame duck Congress to pass, finally pass the stock trading ban. Would you another support that? A thousand percent. Yeah. I'm a sponsor of it. But what I did, because we don't have that legislation right now, is when I got to Congress and just recently said it was an independent trust where literally all of the keys of my decision making are handed off.

9:31I have no direction over buying or selling. And by the way, it's the way it should be. Either you have trusts and you have absolutely no access, which is kind of the model I've set up. where you ban it altogether. I'm open to all that. You know, I think the most important thing right now is from going back for a second to the policy front, because we head into the next Congress, and I think this is really important for people who are interested in AI. You know, we need to have smart guardrails in place. This can't just, we can't just be under the system we're at right now under this administration where it's been kind of do whatever you want, rip and run.

10:04These things, these guardrails matter. Now, you also can't be under the Bernie Sanders model, which is just chuck it in a box and toss it into the Hudson, as we've talked about. You have to have a way to protect our kids to actually have smart, not just chips policy, but smart trade policy and protections for our national security and our infrastructure. Our jobs, as you know, we saw in the last election last week, huge anxiety when it comes to data centers and jobs and people's future because, you know, there's all this uncertainty. Listen, if it weren't for what happened with NVIDIA, all we'd be talking about is what just happened with the midterms and why and the reverberations.

10:38But quickly, you mentioned the Commerce Department, you know, was blocking, as you understand, it was blocking some restrictions on Megaspeed that should have been there. Does that mean you've lost confidence? I mean, not that you're going to be the tell on this, but should Lutnik stay or should. Well, we should get answers. You know, I mean, if if indeed there was something of the reasons I would really like to understand why the Commerce Department stood in the way there of actually these restrictions that, by the way, others, apparently several in the administration were supporting. Right. I think the SEC state, I think obviously Treasury and others were supporting.

11:17Why? You know, why were they blocked? What happened? What happened there? These are the kind of things, you know, you deserve to understand. What did they know when about this? What did the White House know? Because when they brought Jensen on the plane, I read that they actually knew that there was some suspicious activity here going on. So what happened then? What was he privy to? When you're dealing with national security, with our critical infrastructure, with these things, you can't mess around. We are in a race. It's got to be won the right way. But part of that is making sure we really do everything we can to protect our country and our advantages we have.

11:52And finally then, if and when Jensen Wong appears before your subcommittee, what are your questions? What's the first question you want to ask him? Well, some of those things I won't talk about here on the classified side. But I guess broadly speaking, I'd really like to understand what did she ask him about? What are those questions? What are the answers he gave? You know, are there things that he allowed to slip through because she encouraged it? You know, and again, and these are the things we don't have the answers to. Was she a spy or not? You know, what was she doing with the information?

12:31You know, we have to understand these things. This is not the first time when the Chinese government, with any company, we know the Chinese government has lots of access to their companies if you operate there. So we have to be always wary of these things. And chips, the advanced chips are like gold right now. Absolutely. Right? We have to be very careful. And also, I'd like to understand going forward with NVIDIA, and I'm sure you have the same question, what happens now? Like, what's about their chip schedule? Who's in charge? Like, how do we keep them on track? We don't have a lot of domestic chip producers, right?

13:03So we need to keep advancing in the right way with the right guardrails and the smart way that protects our infrastructure, our critical infrastructure, national security, But we can't just suddenly lose a major chip supplier. And so what will happen there? And I'd like to understand that as well. All right, Congressman, thanks. Really appreciate it. Thanks for joining us today. Congressman Josh Gottheimer of New Jersey. Our next guest says one question that hasn't gotten enough attention in the NVIDIA saga is not just the lack of succession planning at the world's largest company. It's also the fact that stock exchanges have very different requirements around it.

13:39The New York Stock Exchange mandates a succession plan. The NASDAQ does not. And the next big IPO on the NASDAQ is coming with Anthropic next week. Let's bring in Vahan Janjigian. He is the chief investment officer at Greenwich Wealth Management. It's a great point, Vahan, and it's great to have you here. Thank you very much, Kelly. So maybe if there had been a higher standard, even at the exchange level, they would have been forced to come up with some kind of succession policy for this situation. That's right. As you said, the New York Stock Exchange requires that companies listed there have succession plans.

14:11And they have to let us know that they have a succession plan. They don't have to tell us who's in line, who's going to be the next CEO, but they have to tell us that they have somebody in mind, especially when an emergency situation comes up. You know, I like to give Berkshire Hathaway as an example. You know, prior to 2003, they never talked about succession. But then when the NYSE changed its rules, every year, Berkshire Hathaway made it clear that they had a plan. They had somebody in mind just in case something happened to Warren Buffett. They never told us who that person was, but they assured us that they had a plan.

14:49But if you're listed on the NASDAQ, that's not a requirement. But what's amazing to me is that you would think the board of directors already has a fiduciary duty to do what's best for the stockholders, and having a plan would be part of that duty. So I find it hard to believe that a board of directors, when you have a star CEO like Jensen Wang, hasn't sat around and thought about this and talked about it and said, what happens if Jensen gets sick? What happens if Jensen, you know, God forbid, dies in a car accident? What happens if he takes another job? Who do we have in line to take over at least temporarily until we can fill the role permanently?

15:28Well, I'd love to see the Nasdaq make this a requirement. I mean, if nothing else, especially as they've become so crucial with all of these major tech companies, these widely held names, a lot of the newer ones, they kind of set the tone in that way as well. So what do you do about NVIDIA, Vahan? Remind me if you had had a history here of ownership. I thought maybe you had. This was the stock. If you ask people, what three stocks can you own and you can participate in the wealth upside for 10 or 15 years and you'd hear, you know, SpaceX, NVIDIA, maybe on Threatway. Like these were the horsemen of investing.

16:00And now one of them is decapitated. So what now? That's right. Yeah. As we've discussed before, I used to have a pretty sizable position in NVIDIA and my clients' accounts, but I had sold it all quite a while ago, primarily because NVIDIA had become so big and such a major component of all the market indexes that it was too much risk to own the ETFs and also own the stock individually. So I have very minimal exposure to the stock directly, but of course I do have those ETFs. But what happens now? My major concern right now is, you know, as your previous guest mentioned, what exactly was the involvement of Jensen Wong in this in this scandal?

16:42Was he aware that he was circumventing U.S. laws? Did he actually get the permission from the Commerce Department? And if he did violate some some rules, can the company itself be held complicit and be accused of being involved in a criminal conspiracy? I certainly hope not. The outcome I would love to see is that Jensen Wang eventually gets cleared and comes back to run the company. I'm not sure that that'll happen, but I'd be a little concerned right now. Can the company itself be accused of doing something wrong? And the next thing we know, NVIDIA is in trouble and perhaps has to be shut down.

17:20Then quick, geez, shut down. All right. But the quick and people should understand, like those risks are being discounted in the share price right now, which is down 30 or so percent from the highs. You said you haven't been much doing doing much buying lately, but in your more aggressive accounts, you've been adding some Broadcom, adding some Google. Just a quick final comment on that. Yeah, I think both of those stocks have been sold off so much that they that they're undervalued. I like to look at undervalued stocks. That's not necessarily the same thing as values value stocks. but these stocks, in my opinion, are selling for less than their worth.

17:52So I have been marginally adding some of those. All right. Vahanja and Jigian, great to have you here today. Thanks again. We appreciate it. Thank you, Kelly. Joining me from Greenwich Wealth Management. Still ahead, NVIDIA's China business, as you've just heard, coming under more scrutiny in the aftermath of Jensen Wang's exit. We'll talk to Crane Share's CIO about that and what it could mean for Anthropic. Speaking of Anthropic, the company's IPO roadshow continues today. What a week, with CEO Dario Amadei speaking with J.P. Morgan, CEO Jamie Dimon. We'll bring you those highlights, the comments between the two of them.

18:23That's coming up ahead on The Exchange. This is The Exchange on CNBC.

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19:17That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com slash 5 for details. Your financial life rarely fits between 9 and 5, and the questions shaping your future don't follow a schedule. That's why Citi created Citi Sky, a secure AI member of your Citi wealth team built with the Gemini platform on Google Cloud. Whether expanding your portfolio or planning your future, you'll be able to access tailored wealth guidance on your time. Start building with Gemini at cloud.google.com slash AI. Citi wealth investment products and services are provided by Citigroup Global Markets, Inc., member FINRA and SIPC.

20:03Welcome back. NVIDIA shares remain under pressure as questions now turn to the entire ecosystem the company has supported and financed. NVIDIA's ties to Anthropic in particular in focus ahead of its IPO. The two companies have major commercial and financial commitments, including NVIDIA's agreement to invest$10 billion alongside the offering. Our next guest has had direct private ownership of Anthropic for a few years now, and his firm's tech ETF was among the first to own shares of the company. Let's bring in Brendan Ahern. He is the CIO of Crane Shares. Welcome to you. All right, give us the quick backstory for a second.

20:37When did NVIDIA first kind of get on your radar screen? Was this before ChatGPT or after? And then what about Anthropic? What happens now? Yeah, I mean, for us, obviously, the roots of the firm investing in Asia, Asia Tech, and that's obviously, NVIDIA is such a key part of that ecosystem, 30 % of sales to Asia. Then obviously from our knowledge base, we had the opportunity back in February of 2025 to invest on behalf of Ajax, our U.S.-listed AI ETF, actually invest on the cap table. Back, it was about$6 per share split adjusted back in February 2025. They were doing$376 million of revenue. So just obviously on behalf of Ajax and our shareholders, a tremendous opportunity.

21:23And we believe more upside to go. Tell us about AGIX, ticker A-G-I-X, your kind of AI ETF. What else is in there? So on the public side, we are only about 50 % overlap with, let's say, the NASDAQ 100. So we're shifting kind of between the AI picks and shovels and then also the companies implementing AI. And then we're able to take small pieces in private equity. So we have Polymarket. We've got a great company called IRLabs. Nuro was just in the Wall Street Journal a few weeks ago, autonomous trucking. So it's a fun little fun. It's about democratizing, giving retail investors, professional investors the opportunity to invest without a 2-and-20 style.

22:03Can I sort of ask what price, so to speak, you own Anthropic at? I think the IPO last I heard was between$70 and$78 is where it's going to price. The expectation is it begins trading next week, if I'm not mistaken. So what's the potential upside here? I mean, I think you're seeing tremendous upside demand. And retail vastly oversubscribed, 800 % oversubscribed thus far, twice the monetary value for Anthropic versus SpaceX. Obviously, they've sold to some great companies within their ecosystem, as you mentioned, via private placement. But I think tremendous demand. Obviously, they're listing on NASDAQ, so you know it's going to go into the NASDAQ 100.

22:40As well as they just became a little bit more profitable. So unlike SpaceX, which wasn't able to get into S &P 500, I think a faster track to index funds coming into Anthropic. That's a good point. So the idea, I don't know if NVIDIA's$10 billion investment is at all in question here for this IPO. But if it were, or for some reason didn't happen, would that worry you on any level? Are there any other dominoes that may drop if NVIDIA remains in the headlines? He's before whatever is happening while Anthropic debuts. How would you be thinking about that? I mean, I think ultimately Nvidia sold two years worth of chips.

23:17Even if you see some of that Asia future sales come down, we think there's enough demand from the U.S. side to more than make up with it. So it's an unfortunate situation, potentially some headline risk, obviously stock trading off for Anthropic onward and upward. Quick last question. We've talked about KSTAR, which is kind of your China chip ETF. Jeff has some memory, I think, some AI ecosystem plays in there. How has that been doing in the wake of these revelations? Is it doing better? I know Chinese stocks in general have struggled, obviously. Are their prospects now brightened because of what's happened with NVIDIA?

23:52I think one takeaway is that it shows the U.S. is the tech leader globally, that there's so much demand in China for U.S. technology, including NVIDIA's chips, that they were doing these kind of shell companies trying to get access, not just to the chips directly, but to data center, to that compute capacity, which shows that, yes, China's moving along in terms of low-end chips, if it's high bandwidth memory or flash. They haven't got a long way to go to catch up to great companies like NVIDIA, AMD, and others. So I think it kind of puts this AI race, shows the U.S. is way ahead. So does it then actually negatively impact the prospects for something like a case?

24:33I mean, if NVIDIA, if this was all kind of coming back to this U.S. ecosystem, does it slow them down at all or curb demand? I mean, I think ultimately technology self-reliance is something the Chinese government has spoken about due to just kind of some of the export controls that's maybe reinforced. You can take smaller compute chips. You need more of them to make up for, say, one NVIDIA chip or a very high-end chip. So again, they're going to try to keep up. But ultimately, the data center compute of the U.S. is double China. And then if you look at AI compute, like what are the real high-end, the processing power of U.S.

25:12data centers versus China? The race is over with. The U.S. has won, particularly with all the further capacity coming on in the next several years, just data centers under construction already permitted, regardless of what kind of maybe happens with some of the proverbial blue wave and some of the tamping down. All right. So you don't see a big inflection point here either because of NVIDIA in the midterms or anything like that? No, no. I don't think so. Brendan, thank you very much. Appreciate it. Leave it there for now. Brendan Ahern from Crane Shares. Coming up, a deer in the headlights. That's how Jensen Wong reportedly described former CEO, CFO Colette Kress, who's now replaced him as the interim CEO.

25:51We've got more color from the hours leading up to his resignation. Next, Don't Go Anywhere.

26:06We'll be right back.

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27:12With the new host, celebrity contestants, and this time, audience voting will influence the game, you decide who has what it takes to win. Watch the Hulu original series, The Circle, on November 17th, streaming on Hulu and Hulu on Disney Plus for bundle subscribers. Terms apply. As we close out a tough week for the NASDAQ as it's down another 1 % today, the Dow is only fractionally lower, though, and the S &P, I mean, you got to give it credit. It's one of its biggest components, declines 30 % from the highs, and the index is down a little. It's down two-thirds of a percent today. In fact, despite these drops, all the major averages are still on track to end the week higher, and the S &P and the Nasdaq would snap a four-week losing streak.

27:54Bitcoin, meanwhile, is also down sharply today. In fact, below 70 ,000 for the first time since August, and it's at 68 and change. It's on pace for its first six-week losing streak since February, and shares of Coinbase are falling to their lowest since February of 2024. It's only down a percent today, but it's about to see its first seven-week losing streak in four years. Robinhood set for an eighth straight week of losses, and strategy is trading at August lows. Here's another look at NVIDIA, down 3 % today, above yesterday's low of 148. We're at 161, kind of holding in there. That level, 148 wasn't seen for about a year and a half.

28:32It's shed$640 billion in market cap since Friday. That's the size of Netflix, Disney, and Qualcomm combined. The stock is having its worst week since Jan of 25. It's sixth straight week of losses, its worst losing streak in 14 years, and it's down 31 % in that time. Now, new details are emerging about Jensen Wong's management style. The Wall Street Journal reporting one episode from this summer where he tore into the woman who is now taking over for him as CEO, Colette Kress. And we're getting some more color on the hours leading up to his resignation yesterday morning. Our Seema Modi is here with more.

29:07Seema? Kelly, two things we've learned. One is that the board meeting with Jensen Wang on Wednesday afternoon did get tense, ultimately leading to Jensen Wang's resignation. Yesterday afternoon, Kalec Kress conducting her first meeting as interim CEO with the same top-level executives that previously reported to Jensen Wang. This meeting, I'm told, was in person. Among the pressing issues discussed, communication around earnings, how to address new questions on its regional sales across Asia, given unconfirmed reports that NVIDIA may have circumvented export controls and sold advanced chips to China.

29:40Another big priority is leadership. Just in the last hour, the Financial Times reporting that Rene Haas has been approached by NVIDIA as a potential successor to Wong. Haas, who is 64 years old, has been CEO of Arm Holdings for four years now. Previously did work for NVIDIA from 2006 to 2013 on computing initiatives. I'm told he has a strong relationship with Wong himself, Kelly. and he has that strong semiconductor experience starting his career actually at Texas Instruments. We've reached out to NVIDIA for comment, but again, the FT reporting that this is among the candidates that NVIDIA's board is reviewing.

30:17Yeah, and Jim Cramer was making the point that maybe it's good that the CFO was pushing back a little bit on what she saw at the top. I think in many ways, everyone wants a doppelganger of Jensen, someone with that drive, that vision, who can take the company, keep it. And so maybe it's good and maybe she was right to speak up a little bit. I don't know who might be able to take a company with 50 or 60 direct reports because that's how they kept their lead and kind of kept a lean organization and can run with that and, you know, reassure investors who have a lot of concerns right now. It may just come down to the criteria that NVIDIA's board is using to fill his shoes.

30:53Is it actually just to find someone who is like Jensen Wang or someone who can lead NVIDIA at this moment in time, given how competitive the landscape is getting? Perhaps he changes whoever comes in, he or she, the organizational structure of NVIDIA because 60 reports, direct reports, you could say is very high. And that's why we're going to be watching for just more details that emerge from this search. I think the timing, the fact that there's potentially already one person in the mix that they're reviewing with earnings just days away on Tuesday. I'm wondering if this decision is going to happen before then.

31:26And obviously someone with some experience kind of need that. I hate to say it, but, you know, in front of Congress. But that's also going to be something where you wonder, do you need another Steve Jobs or do you need a Tim Cook like figure who can just be a steady hand throughout a difficult period? But in any case, an outsider, I can see how that might be helpful. Seema, thank you. Thanks. Our Seema Modi reporting. Let's get to Frank Holland for the CNBC News update. Hi, Frank. Hey, good afternoon, Kelly. A federal grand jury has added an attempted terrorism charge to the case against Cole Thomas Allen, the man who was arrested after he opened fire at the White House Correspondents' Dinner earlier this year.

31:59It's Allen's fifth charge related to that incident. He previously pleaded not guilty to attempting to assassinate the president, assaulting an officer, and two gun charges. Protesters in at least a dozen major cities across the U.S., Canada, and Europe are planning to march tomorrow to demand an international AI treaty. These advocates say President Trump and Chinese President Xi Jinping should negotiate a treaty to ban the development of more powerful AI systems until they can be built more safely. Protests are expected in Washington, New York, and in San Francisco. And a Paris judge has ordered a cognitive assessment for the Hermes heir, who says his 6 % stake in the company went missing.

32:35According to Reuters, the findings could lower the bar for criminal liability in that investigation into his missing fortune. Kelly, back over to you. All right, Frank, thank you very much. Coming up, we'll look ahead to NVIDIA's earnings report that's coming up next Tuesday with one analyst who's downgrading the chip maker and upgrading one of its rivals. We'll get into those details next.

33:01Next Tuesday, after the closing bell, we get the latest quarterly earnings report from NVIDIA. An extremely awkward time, to say the least, for the company. Of course, everyone will be listening for updates on succession plans and assurances about continuity after Jensen Wong's resignation. Analysts are also watching memory cost pressures for what it's worth and margins and neocloud customer demand. Our next guest just downgraded NVIDIA to market perform. Joining us now for earnings exchange is William Blair Semi and infrastructure analyst Sebastian Nagy. Sebastian, welcome. It's great to have you here.

33:34Thank you. Good afternoon. Thanks for having me. How are you thinking about NVIDIA? You can feel free to cry if you think it's appropriate. Yeah, I mean, it's been quite the week. I mean, I think it's honestly been a pretty sizable moment for the AI ecosystem, for NVIDIA itself. You know, Jensen's departure, I think, leaves pretty big shoes to fill here. And there's, you know, the overhang of succession, there's the overhang of additional regulatory scrutiny. And so as much as, you know, I think the report next week will actually be quite strong and the fundamentals of the stock and the company are all pointing in the right direction.

34:11This overhang with the succession plan and the additional scrutiny, I think, means that it's going to be a tough go for shares until this uncertainty clears. Dan Ives earlier in the week had said he thinks the company's worth$300 with Jensen,$225 without him. I'm curious if you have similarly a kind of a binary take on who's at the helm at this point and which kind of leader you think would give you the most share price upside? Yeah, look, I mean, I think it's always hard to put an exact value on Jensen's value on Jensen at NVIDIA. I mean, we've never really seen NVIDIA without Jensen at the helm.

34:50You know, as much as NVIDIA is going to be fine, I think on the product side, they have a very deep bench of very strong technical talent. The product roadmap is designed and pushed forward, not just by Jensen. I think what they are losing with Jensen's departure is sort of their dealmaker in chief. Jensen was a big part of some of the creative financing deals to help shore up demand across neoclouds, across the AI labs. He was integral in securing significant portions of the supply chain by going to Taiwan and TSMC and getting way for allocation there, going to Korea and having fried chicken and beer with the memory leaders there and getting allocation there.

35:33And I think that's going to be the challenge here is to find someone who can bring that same sort of salesmanship to NVIDIA at a very tough time. Yeah, a friend of mine who worked for the company, you know, or in earlier days back during the video game era, knew Jensen personally, is both upset and outraged, just furious at him, frankly, and had been buying the shares as these headlines first cross and is finally saying, he said, NVIDIA without Jensen to him is Intel. No disrespect to Intel, but you know what we're saying. I'm curious if you would agree, you know, how different is the company with anybody else running it?

36:09Yeah, I mean, I think it's a big loss for NVIDIA. It's hard to put an exact number, And, you know, I do hope that I'm back here in six months talking about an upgrade and all of these overhangs have cleared. But but, you know, there's I think only a handful of people that that are of the caliber of Jensen in terms of, you know, the relationships that he's he's built over the years and finding someone who has that same pedigree that, you know, that same history and those same relationships will be integral for NVIDIA to maintain its lead. And I think that's really the challenge that the board is facing right now is to find someone who can who can fit that role.

36:48Would Rene Haas? I mean, is that the right kind of I love how we're all nominating him like he's just going to say, yeah, sure. But a person like that, maybe chip experience, but they're a company outsider versus more of a company insider, maybe the head of engineering or something like that. Yeah, I mean, it's hard for me to speculate because I know what you know. I've been reading the same news headlines as you have. I do cover ARM and have interacted with Rene across that coverage. I mean, I think he's a great leader. I'm sure the board will make the right decision. I think one of the challenges is that NVIDIA, its corporate structure, it's the fact that Jensen had these 60 plus direct reports means that it is a little bit of a, I think, challenging a company to restructure and change in a very quick way.

37:37And so even with, you know, a very strong CEO that has a good pedigree, there may still be some growing pains as you try to move past the Jensen era at NVIDIA. Yeah, he had just given an interview where he talked about leading the company for the next 20 years. You know, he was asked about, you know, whether his daughter or something could take over. So obviously he did not foresee at all how risky these behaviors were. You upgraded AMD today as well. I just wanted to mention that there's been some back and forth about whether they get hurt or benefit. but up 15, 16 percent and they go to outperform for you.

38:10Sebastian, thanks so much. And we'll see how it goes next Tuesday. Thank you. Sebastian Nagy from William Blair. Coming up, Anthropics IPO Roadshow also continues with the CEO speaking with Jamie Dimon in New York City today. And we've got the headlines and we'll see if there's any signals for the AI ecosystem and trade. That's coming up next.

38:34wall street is counting down to anthropics highly anticipated ipo next week it's coming at a tough time for the ai trade though but ceo dario amade is striking an upbeat tone last hour when he spoke with jamie diamond the jp morgan ceo jp morgan is part of their underwriting group let's get over to kate rooney who's got all the details for us in today's tech check hi kate hi kelly well this was part of Anthropics IPO Roadshow. So it was the latest stop. We did hear from JP Morgan CEO, Jamie Dimon. This was sort of a fire side chat with him and Dario Amadei. His firm is an underwriter in this IPO.

39:10It's also helping lead the retail investor push wide range of topics from these two. But Dario Amadei did add some nuance to Anthropics strategy on compute. He called$900 billion are set to spend a large amount. But he does say that their move right now has been to buy relatively little compute, as he put it, compared to competitors. He told Diamond, quote, we tend to buy on the low side and buy relatively little compute for relatively low cost ahead of time. And then he says, if things don't go well relative to expectations, then they're covered. But if things go really well, then they have an opportunity to buy more compute and additional compute on the spot market.

39:49He says so far, it's always been available and they believe it will continue to be available. So Kelly, there has really been this debate in the industry about overbuilding, overspending. So Anthropic clearly here does want to be more on the conservative side. Others, though, have argued that Anthropic in the end might not have enough compute. So probably too soon to tell, but we got some nuance in his stance there. Also said there is a buffer of cash on the balance sheet for Anthropic. They plan to raise more, of course, through this IPO. Revenue is growing quickly. Talked about gross margins being better than competitors, at least, and then talked about efficiency of these AI models.

40:24Kelly, he called it a misnomer that there are just these expensive models that they have that are really good, and then cheap models from others. He tried to make the case that Anthropic is able to do both. All right. So nothing there that indicates a big change to their plans. How about, in the meantime, Kate Rooney, what happened with Microsoft? I saw, if I'm not mistaken, I was convinced it was an agent swarm or something, right? They said no. Do we know anything more about what happened, what took down this company for the biggest outage, one of the biggest outages they've ever had? No, it's such a good point, Kelly.

40:57That's where my mind also went immediately and said, oh, it's a cyber issue. They have said explicitly, no, there's no evidence that there's anything malicious going on. It was not a cyber attack. And they said they're going to be updating people in the next couple of days here and doing a little bit of a postmortem. But they apologized, officially said, you know, sorry for the inconvenience. You think about how widely Outlook is used, Teams is used, and how concentrated a lot of people's workload is on Microsoft. I mean, they've made the pitch to enterprises that it should be the go-to and it's helpful to have everything in one place.

41:29This is clearly the example where it doesn't work out that way. Although some people were calling it an adult snow day. I think a lot of people were relieved to not have as much going on in Outlook, but they said basically that their servers were overloaded. And that is sort of the simple explanation. Too much going on in the servers. they couldn't get up to speed quickly enough. But think about it. I mean, this happened midday Thursday, midday yesterday, didn't come back online until this morning, and they're still patching this. So it doesn't seem like there is a seamless explanation. But the only thing we do know for sure, or at least they have said, not a cyber issue.

42:02I wasn't affected. Were you affected? Oh, yeah. Oh, my gosh. I couldn't send an email, couldn't get an email. but I tweeted. I thought it was actually kind of relaxing. You realize how hooked you are to your email. I was sort of, you know, just sat back, had a real lunch. They just said, Tori, you think I was affected? You must have been affected. I think we were all out. I mean, I was checking it on the phone. You weren't responding to my email, Skelly. No. You're right. I should be careful. That's why I didn't hear from you. No, these large enterprises, I mean, a lot of people are affected. I've talked to individuals who said, yeah, same thing.

42:39But small businesses too say, yeah, sure. I mean, the rest of you guys, but we need this to do our business. You think a lot of these sort of banks, private equity firms are maybe in the middle of doing a deal and say, this is just the worst time. And so - Oh, I had family members who were furious. Yeah. I said, switch to Gmail. They're like, I'm a professional. I can't switch to Gmail. So I totally understand. A lot of lock in. It's a sticky enterprise offering, but the shares also didn't react much, interestingly. Sort of flat over the last day here. All right, Kate, thank you for now. We appreciate it.

43:10Kate Rooney. Coming up, back to NVIDIA. The shares are having their worst week since April of last year. And while all components of the semi-index are lower today, the SOX, believe it or not, is still up 7 % week to date. And that's thanks to big gains in AMD, Broadcom, and Astera Labs. Is it a sign that chips are on the cusp of a breakout? And are we even asking that question in this environment? That answer when the exchange returns.

43:39The Nasdaq is underperforming again today. The chip stocks are part of that big time, leading those declines. AMD, Micron, NVIDIA, and Broadcom are shaving 240 points or so off of the Nasdaq 100 today. Despite that, the semi-ETF, the SOX, has rallied more than 12 % since last Friday. And our next guest calls this a buying thrust and says these historically happen at the start of new rallies. Let's bring in Ryan Dietrich. He is the chief market strategist at the Carson Group. Ryan, I have to confess, I'm shocked that the Sox is up 12 % while NVIDIA is struggling so much. So that does suggest something else is going on.

44:18What is that something? Well, you're right. Thanks for having me back. And the last time I joined you was two Thursdays ago. So this day is a little bit better than that one. You know, just week to date, right? NVIDIA is down about 7%. SOX is up 7%. We've seen what Broadcom's done. It's the lifeblood of a bull market's rotation. Now, here's what I think is really fascinating. You hinted at the start of the discussion. Friday and then the three days this week, the start this week, those four days, the SOX was up 17%. When we went back in history, Kelly, that's called a buying thrust. Those events happened right at the lows of the GFC, right at the lows in 2003, the lows of COVID, 2022.

44:58I mean, nobody really knows, but I will say this much. That much strength is usually not just a bear market rally. Some people say it's just a bear market rally. It historically says maybe it's the start of something stronger. And last comment, Tom Lee's been all over this. You're bottom on bad news. We've had a lot of bad news all of a sudden. Yet last I looked, financials are hitting the highest level most have ever hit right now. We've had a lot of strength, broad-based strength. So you're not calling for, you know, NVIDIA's bottom tier or anything like that. You're just saying that the semis and possibly, what would you say, the S &P, the NASDAQ, the NASDAQ 100, that they are all showing signs to you of bottoming.

45:34Is that what you're saying? We think so. I mean, I've come on with you all year, saying this is a bull market, but to be diversified. I mean, we're a slightly overweight technology. Look at growth value. We're probably 52 % growth, 47 % value. We're not looking to make any huge swings other than being overweight equities to benefit. Now, let's be clear. NVIDIA is like, what, 20 % of the stocks, like 6 % or 7 % of the SP100. Of course, that stock matters at the same time when you see this type of a buying thrust with rotation. Just today's perfect example. I mean, you look at what's happening just today, there's six sectors that are higher.

46:04Since October 6th, Kelly, the peak, that was the last all-time high. Technology is down well over 15%. But seven sectors are up more than 5%. I know we all kind of know this, but when you put it like that, that's why we would say don't take any big swings in any sector specific, just own different parts of the market and just enjoy this bull market. We're going to have scary days. It happens. But when you own some of the other stuff, you can withstand what we saw last Thursday. Ryan, someone asked me if they should buy the NASDAQ 100. And so I will ask you the question, not, I guess you would say the answer is always yes, but is now, does now present to you a unique opportunity, you know, because of its valuation and a little bit of the pullback that we've seen.

46:44Yeah, we think so. I mean, look, it's just sentiment, I mean, back in the peak in June, everybody loved all this stuff. And then obviously we've seen what's happened, right? If everybody's thinking like somebody's thinking, general patent, clearly those areas have pulled back a lot. And that buying thrust I just mentioned, you look at P multiples and other guests point this stuff out, but these stocks are about as cheap as they've been for a while. Now, listen, they've gotten hammered and someone could have said a month ago they were cheap. So I'm very cognizant of that. At the same time, I think large cap tech very well could lead us into a pretty solid fourth quarter, or at least rest of year rally is what I should say.

47:16One more kind of, go ahead. Listen, they're playing our music. If I had time, I'd ask you about gold. I ask you, you can just do a thumbs up, thumbs down. No, we'll bring you back. Yeah. Okay. And do it next time. Ryan, thanks very much. Ryan Dietrich, appreciate it. And that's it for us. Thank you for watching The Exchange. Our coverage picks up with Brian Sullivan on Power Lunch right after this break.

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