特別レポート：ジェンスン・フアンの失墜とその後に来るもの

Jensen Wang is out as the CEO of NVIDIA in a stunning fall from grace, but that's not the end of the story. It's just the beginning. That's coming up on a Big Technology Podcast Friday edition special report about the fall of Jensen Wang right after this. How do you price intelligence as a service? How do you charge for delivering end-to-end work, not just access? Those questions remain front and center for AI founders and operators. and getting to the right fit business model, whether that's selling usage credits, outcomes, seats, or a hybrid combination requires constant iteration. Chargebee is the billing and monetization infrastructure that powers just that for ambitious, fast-scaling AI businesses. Visit chargebee.com slash Alex to learn more. That's C-H-A-R-G-E-B-E-E dot com slash Alex. Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional cool-headed and nuanced format. Today, we look into the fall of NVIDIA CEO Jensen Wong, what's responsible for bringing him down,

but also what lies ahead for the company and its competitors and USAI Labs in the aftermath of this stunning news development. We're going to break it down in depth for you today in a one-topic show, and we're joined, as always, by Ranjan Roy of Margins. Ronjun, good to see you. Welcome to the show. What a boring week. What a boring week. Nothing has happened this week. So we pick up this week, we're going to go through a lot about the ousting of Jensen Wang from NVIDIA, but we're also going to talk a lot about, again, about what it means for the company and its competitors. There's stuff that we're going to discuss that I think has not been talked about in the broader narrative about what's going to happen. And so I'm very excited to speak with you about it today. Let's get to the news right away. It's from the Wall Street Journal. Jensen Wang has been ousted as NVIDIA CEO. NVIDIA Chief Executive Jensen Wang has resigned after two extramarital affairs, including one with a suspected Chinese spy and another with an employee. Well, the news is moving so fast that when this was written after he was ousted,

another affair came out shortly afterwards, and it's probably not the last. The company said Thursday that finance chief Colette Cress had agreed to serve as interim CEO until a permanent successor is named. The board is starting a search for the company's next CEO and will consider internal and external candidates. Now, I did a special report solo pod on Monday about what was going to happen to Jensen. And because there was just one affair, I thought the board at that point, I thought the board would do whatever it could to hang on to him. And that's how I concluded that show, turns out much more came out, not just about the affairs, but about the business dealings that he had had in allegedly funneling chips to China that were restricted there and going against the export control. So that will be a big story that will actually continue to roll through the next couple of months. But Ranjan, I just want to get your reaction here on the surprise level of what's happened since we've last spoken. Where would you rate this one?

I can't even I have a hard time even trying to remember the world when we last spoke, because it is a very different one now. I mean, we're going to dig into it. I think all I can keep thinking is that this is the beginning, not the end of the story, that there is so much more to come out, that there's so many twists and turns in terms of how this kind of overlays over the entire AI story and like US politics, the Anthropic IPO that we'll be talking about hopefully next week. Like all of this is directly connected and this is just kind of the first explosion in whatever is to come soon. Now, there were signs. I mean, he did sign a boob. Sorry, he signed a bra at At a conference. Maybe that was – well, okay. Well, anyway, I don't want to get technical about it because that debate could last a while. But I don't know.

I go between we should have known better and everyone just kind of brushed that off and sort of like, well, unless you have direct reporting on it or direct knowledge, how would you know? Well, I still think this is one of those reminders that the culture personality for technology leaders has just become so big that everyone overlooked, everyone just kind of falls for it. Again, I keep thinking like there is such a narrative that was built around, you know, like he doesn't do anything but work. He's answering emails at 3 a.m. Remember, we sadly said he was going to be the good face of the AI industry a while ago. And one of the concerns was maybe – or it either could have been good or bad, but it was that all he did was work and he couldn't think of anything else. And now there's photos of him drinking wine with his mistress in Shanghai at 2 p.m. Like, so I think a lot of those narratives, it's just a reminder that, like, trying to ascribe so much value to the person and the character rather than these are just businesses and they should be just businesses.

To me, kind of, if we're moving back to that, that actually kind of makes me happy. Yeah, I do. I'm glad you brought up our conversations about how amid AI's PR problems, Jensen might be the good guy of AI. Out of our worst calls, our worst calls. We made some mistakes, but this was the worst one. I also want to say that I like that you've pointed out this sort of myth about working 24-7. And, you know, we're up to three reported affairs and counting. And, in fact, in Wall Street notes that came out, one of them, I'm pretty sure, from Bernstein was like, where did he find the time? I mean, he clearly did. He clearly did. But it's, yeah, I don't know. I'm trying to genuinely separate out, like, whatever it means for him at a personal level, whatever it meant for his hour-to-hour going-ons versus, yeah, what this means.

Because, again, and the memes have gotten well into that. I genuinely feel horrible for his wife and family, like, because the vitriol of memes going around is just like if they are to see any of that. But I think there's – I'm almost not worried because I think attention is just going to continue to shift to the business side of the story as it already has. Right, and as I talked about in my special episode on Monday, it wasn't just the affairs. In fact, if it was just the affairs, you know, while damaging, there was a chance that the board who saw Jensen for a long time as this sort of singular figure within NVIDIA might have let everything slide. But it's what the affairs exposed NVIDIA to. And, you know, we have this reporting on Alice Wong, who some security sources within the United States government have said is a, you know, a Chinese intelligence asset. And she, of course, was the first affair that we heard about.

you know that that in and of itself and i explained some of the problems with that in on monday the fact that like you know if she was then potentially like if jensen left his phone out and went to the bathroom maybe some of his communications with the president could come out but now the subsequent reporting and this is new has been that we already see that potentially this affair might have led to the circumventing of export bands to send powerful, restricted NVIDIA chips in large quantities to China. This is from Tom's Hardware. Alice Wong reportedly instrumental in securing over 7.5 billion of NVIDIA AI GPU imports during a three-year relationship with Jensen Wong. She helped move 240,000 band chips into China, mostly the H100 and the H200. this is an interesting note from the story when ai shipments hit delays or face some trouble miss wang allegedly would step in to get them moving through the supply chain again

one person who knows her said she would often cite her close relationship with nvidia and its suppliers as the reason why she could always get nvidia chips now these are obviously just reports but if you think about the broader implications here this to me is the number one problem it's It's like the U.S. has laws, strict laws, about not circumventing export controls. There were restrictions on these chips. If you break these export control laws, you can go to jail for 20 years, go to prison for 20 years. And why are they set up? Well, as we've sort of talked about for a long time on the show, it is, number one, a national security issue. We've seen what the latest AI models can do from a cyber warfare perspective. We've talked about it on the show. we saw what happened with Hugging Face. China's about six months behind the U.S. on frontier AI. You want to be ahead so you can defend versus, you know, have to chase there. And it seems like just from these reports, you just read the headline, assuming they're accurate.

Jensen was completely disregarding them with somebody he was having an affair with. You know, it's just like with somebody, yes, some within the United States intelligence community believes was an asset to Chinese intelligence. That is the core problem here. You cannot do that. Well, especially because are they a spy? Is she a spy or not a spy? One level. Is she influenced directly as a vendor, mega speed in Singapore's ability to procure chips? Another issue. And then, yes, is this a front to actually funnel these chips into China, which it certainly does look like more and more based on all the reporting. So at every level, it is a disaster, I think. And the frustrating part of it is, should China have access to these chips? I do think it's still open to debate. There's a lot of nuance. There's a lot of different ways one could try to understand this.

And Jensen, that famous Dwarquish, which will now go down in history. What did he say? Like, we are not a car. You're not talking to somebody, you're not talking to someone who woke up a loser. Yeah, we're not a car. Yeah, the two greatest quotes, you're not talking to someone who's a loser and we're not a car. But, like, should China have equal access? Is our Chinese, again, there's, like, the cybersecurity element of it, but also are Chinese models good for competition? Is open source good for competition? There's a lot of different ways we can all try to understand or process that debate. But the problem here is we're not actually getting an honest view of that debate. Because on one hand, if the government's saying we're cracking down on these, we're imposing export controls, and then they're just being completely circumvented. And again, estimated 20% of revenue is related to these chips. A lot of them were going to get more into potentially trained deep seek models.

I mean, none of it mattered. Like any talk anyone had trying to actually rationally approach that debate was all just for not because it was all just happening anyways through this. And then that is a huge issue. Right. And of course, Alice Wong, you know, was the person that was linked to, you know, linked to Chinese intelligence. by some U.S. officials. She was also this executive at Megaspeed that was basically buying these chips and seemingly, according to the reports, sending them into China. And she was operating out of Singapore. And the U.S. government was looking into it. Commerce, I believe, was looking into it. That whole part of it. Yeah, NVIDIA's legal leadership had such sway that they apparently were able to get their nose into the U.S. government and switched jurisdictions in terms of who was able to look at it, and it went over to the DOJ after that investigation heated up,

which is like, I mean, now that we know the full story, it's improper on the highest level. And we do not know the full story, my man. Now that we know as much of the story as we do, it's improper on the highest level. Yeah, okay, okay. I mean, yes, if the NVIDIA, actually one thing I'm just going to bring up, I've seen a lot of major newscasts still calling it Navidia. Have you seen this? Can we all just agree? It's NVIDIA. NVIDIA. That's right. Let's just say it. It's the Latin term, NVIDIA. It still boggles my mind that people at the highest levels, everyone out there, it's NVIDIA, not Navidia. Let's just stop. I'm glad on this week of news that's what you've found. It's been killing me when I'm watching someone on a major network. Didn't someone prep them? But anyways, so I think the internal U.S. political story, there's a lot to come out.

Even this morning, Scott Besant is finally having his – I mean, he's at a – didn't he throw a punch at Lutnick once or something? Like, finally, he's having another moment of going after Howard Lutnick. And, like, there's going to be so much continued fallout internally. Will it actually result in export controls for NVIDIA, like, actually enforcing it? If it was estimated around 20% of their revenue, what does that mean? I mean, yeah. A lot more of the story to start to take place here. Yes. and the interesting thing is that NVIDIA, when this was all going on, it seems like it made some financial maneuvering to sort of hide Singapore sales from its financial statements. This is also from the Wall Street Journal. NVIDIA's disappearing Singapore sales deep in mystery around Megaspeed. As recently as the summer of last year, Singapore was officially one of NVIDIA's biggest markets, generating 22% of the chipmaker's revenue.

Then practically overnight, it disappeared from the company's financial disclosures. And the timeline indicates that NVIDIA altered its methodology for reporting the geographic breakdown of its revenue shortly after placing Megaspeed International on an internal block list. Seems like in October 2025, it switched its reporting methods. It went from reporting geographic revenue from the location based on the customer's headquarters to the customer billing location. And so it switched to the headquarters versus billing location. And the story says subsequent disclosures recasting prior period results indicated that NVIDIA reclassified the bulk of Singapore billed revenue as U.S. related. While revising revenue higher for both China and Taiwan. I mean, oh, like, you know, it's cliche to say the cover up is worse than the crime. But, you know, when we get to look and of course, we're looking at it at hindsight.

and of course like you know for us who analyze this stuff all the time it fair to say well why didn you pick up on that before sort of you know sort of beside the point at this point in the story No no it is fair to say This is bad No no See this specific story I going to say it is fair to say to ourselves and to the entire financial press all of this was openly in their earnings reports a year ago. And I saw on, I think, like, Ed Zitron Twitter feeds and, like, reposting of others, And this kind of information, and I think this is actually like one of the most important parts of this story, is anything that questioned the largest and most successful company in the world a year ago was kind of pushed back to the levels of conspiracy theory. But all of this was out in the open a year ago. And I genuinely think like it shows how different the world is today versus a year ago that no one picked up on it.

No one in the – and I actually even wonder, do you think – were there reporters who actually were pitching? Like, oh, I came up with something and editors were just like, I don't think that's going to land. Okay, so I have two – so we were going to talk about timing. Let's just do it now. I have two theories about the timing of the whole situation. The first is sort of the obvious one, which is that Jensen and President Trump were so close. And, you know, he like held up the, you know, he had the phone call with President Trump at the All In Summit. And at first that seemed like, you know, a gag. But now in retrospect, maybe it was like, don't mess with me. I'm this close to power kind of symbolism. them. And so once Trump, once, sorry, once the Republicans lost the midterms, it became sort of open season, especially those in the administration who are basically like, well, we're a lame duck now. So we're going to go after our targets because there's clearly been some infighting there. Our intelligence maybe who are just like, we're sick of, you know, these people and now

they're not in power anymore or they have less power. So we're going to go for it. So that might be, you know, one part of the timing. But the other part of the timing that I think is worth noting is that like a year ago, AI capabilities were just not this good. And I do think the fact that we've had the hug and face hack, we've seen other like, you know, sort of red alert cybersecurity issues. We've seen like the advent of mythos and other very capable AI security models has suddenly made this idea of like giving, you know, giving China access to this type of technology might actually be bad, as opposed to a year ago where everyone was like, well, AI is not so good, can't code reliably on long horizon tasks. Like, now it can. Now it's better. And all of a sudden, these things that were theoretical risks a year ago become real risks today. Okay. You know what? I really like your second point, because I had not thought of it that way. But you're right. Like, a year ago, oh, no, China's going to get to, like, do better chat GPT and, like,

queries versus, oh, no, this is all real. Like cybersecurity threats are very real. So that is different. I think on the first point, I can't get this one thing out of my head. And it's interesting. I read it. Talking Points Memo is a political blog, and they cover political scandal. I've read for like 20 years, early blogger days. And Josh Marshall, he had this post before Jensen was even out around, and he calls it the scandal conveyor belt. and he had said, we like to think that press coverage and investigative journalism is logical, linear, and additive. A reporter finds out the details, brings them to the public, and keeps going, but it's not simple. Like a play or a novel, it has conventions or acts which different things have to happen, and it needs to move forward to have life. It needs other players with different and greater powers to get involved. If that doesn't happen, it loses steam. And what I kept thinking is, I mean, And you mentioned the midterms, but I actually think it's much more like largely tied to that because we went two years and it's hard for us to like just think about all accountability was removed from the system.

Like everything when you think about conventional accountability. Now, every reporter, everyone on Twitter, everyone knows that there can be accountability. The moment the Democrats won that election, there can be hearings finally. Two weeks ago, this story could have come out and the assumption by everyone pursuing it would be, I mean, Trump Jensen is just going to kind of go away. It's going to get protected. It's kind of crazy to think like we've gotten so used to the assumption that there's going to be no accountability that it's almost jarring when suddenly there is. And now everyone's playing catch up on Singapore and Megaspeed, which was out in the open a year ago. Good story from Reid Albergati in Semaphore. Jensen Wang's biggest mistake was getting too involved in D.C. Jensen Wang made a lot of mistakes, but the one that really brought him down was getting too involved in D.C. politics. The skill set of a great technologist is the opposite of someone who's great at politics.

Technologists have to think years, sometimes decades in advance. When they figure out a winning formula, they've got everything on it. That's a really bad way to operate in Washington where things move on two-year election cycles, and commitment to any one idea, faction, or ideology is a liability if and when the political winds change. Does that basically make sense? No, no, but I want to push back. Like, I think this is bigger than just political allegiance. I think this is bigger than just he was aligned with Trump, Republicans lost. I really think it was, again, when you think about, like, prediction markets or just the overall AI circular finance. Like there has been no feeling that anyone can be accountable for anything for the last few years. The whole trade was cozy up to Trump and then you can get whatever you want. And this was a good case of that. But just flipping that switch to me that this reporting could lead to a congressional hearing or could I think the board ousting him that factors in like, I don't know.

I think this is what actually to me feels like the beginning, not the end of the story, even more so, is because now every one of these things, and I think it feeds into your point as well about China as a real threat now. Like it's felt more real and realized. Yep. I mean, basically, it's crazy to me how quickly this happened a few days after the election. and we can get into any conspiracy theories around exact timing if there are. But, like, to me, that's the center of it. I think, yeah, I think you can read it for what it is. And let's just keep going with this China capabilities because they have gotten, you know, we know that the capabilities within China's AI industry have become extraordinary. And, you know, your question will be, how much have the chips that Jensen sent over there, maybe, you know, trying to circumvent these export controls, how much have they played a role?

Well, I just want to point your attention to Will DePue, the former OpenAI employee who worked on Sora 1 and 2 and post-trained 03 and 4.0. So he was very deeply involved within OpenAI's research. He said, I have a major result to share. I found conclusive forensic evidence that the top four Chinese AI labs, DeepSeq, Moonshot, Minimax, and Amp Group have built their newest models on NVIDIA's most advanced Blackwell chips, which are barred from export to China. And he basically takes a look at each lab. So DeepSeq V4 Pro was built on Blackwells, he says. Moonshot's Kimi K3 was built on Blackwells, which is Minimax M3 built on Blackwells. Ant Group's Ling 3.1 Flesh built on Blackwells. There were not supposed to be access to these chips within China, and I think Dylan Patel from Semi Analysis even responded and said, you can just look at the code and it's clear that these models were built for Blackwells,

which is like from everything we know now, it seems like NVIDIA was at best careless, but at worst basically played an active role in making this happen. That's a genuine national security issue. Yeah, I don't think there's any question about it. I mean, honestly, like in the more that comes out, but I mean, it's in the earnings. It's in the financials. It's in, like if those chips are, Singapore did not buy $8 billion worth of chips. so then who is buying them obviously china and mega speed we'll get into like i mean we already discussed it alice swang all that and then what are they going to do with those ships train deep seek and moonshot and minimax so so i think like that part i don't know i i've not even seen anyone questioning that that is what was happening so it then it all becomes assuming that was happening

Do you think this gets into criminal territory? It could. It depends on who's got the level of power. But, yeah, it is interesting because there's been this debate of, like, well, you know, everyone who wants Jensen out is a Puritan, right? I mean, there's been a large segment of Silicon Valley who've been like, he shouldn't have been out. Toby Lutke, for instance, from a very vocal Toby from Shopify, for instance. Yeah. It's from Alex Sharp. He says, guys, enough. That Jensen got fired by a corporate woke board because he was a horndog narrative is ridiculous. One of the most important CEOs of any company on the planet got honeypotted by a spy of her main geopolitical adversary and in doing so possibly knowingly violated federal trade restrictions and other laws, including the Espionage Act. He will be under constant investigation by several arms of the federal government and Congress for the foreseeable future, investigating the scope of the damage, national security repercussions and legal consequences.

Now, OK, believed to be a spy. I think we should just say that by elements of the U.S. government as a caveat. But, you know, it's coming at Jensen still from both sides of the government. You have Republicans like Kennedy, who's basically called him out for doing what he did. And Elizabeth Warren has said just because he's resigned doesn't mean he's not going to face accountability. So as far as the Jensen story, it will continue. The investigations, I think, will be a little bit easier because he's not the NVIDIA CEO anymore. But it doesn't mean they're going to go away. And for NVIDIA, it will continue because people want to know, you know, was he the only one that knew about this? It's like, for instance, for instance, Clay Crest, the new interim CEO. Is it possible the CFO, you know, who was preparing earnings results didn't know what was happening? These are major questions that we'll all just have to work through over the next couple of months. Yeah, I think the political angle, the investigation angle, both whether it's like traditional congressional investigations pulling people on Capitol Hill,

whether that's Jensen or, as you said, others, it's going to continue. But then also, like, I think, what does it mean for their business? It's interesting because if the demand for compute is infinite, they should be able to completely actually cut off China and be fine. But it's clear that that was a large percentage of their business. So what does that actually mean for them in the short term and then even in the medium and long term? So I think all of that is definitely going to be up. And on the political side, I just want to apologize. guys, Scott Besant. I had mentioned that he had talked about punching someone or either punching someone or talked about punching someone in the fucking face was the exact language. But he was actually apparently quite, it was Bill Pulte, the federal housing finance agency head. And I didn't realize this, but apparently in a congressional hearing, he was asked about that Besant was, and he said, no, sir, I actually said I was going to kick

his ass. So, Scott Bessent, I don't know how you, we know how you feel about this, and I think you're going to come out and be kicking some ass very soon. He was the smart. But you asked, Rajan, you asked a question that I don't think we should just, you know, glance over, which is, I think this is also one of the key questions because it goes to NVIDIA's health. Why did Jensen go through such pains to get GPUs to China and go through these shell companies. I mean, all we hear about in the U.S. is that the demand for GPUs is infinite and you can't get any allocation and you got to like do things to get allocation. Meanwhile, you know, I wonder if the truth is a little different, that actually the demand is not infinite. And, you know, the opening eyes in Anthropics of the world have basically used all the, well, actually Anthropics has so much money on hand. So maybe they were looking for chips. I I don't know. It's really difficult to sort of wrap your head around it.

But it has opened up this question for me about whether there actually is as much GPU demand as we're led to believe. I think that is a central question, both from a financial slash economic standpoint or in terms of NVIDIA's health. But it is also like a geopolitical question as well, because if it's true that compute demand is infinite, then you should not be that that would mean that you he was actually circumventing export controls to sell to china almost from an ideological standpoint like because if it's infinite then you shouldn't do that and you shouldn't need to do that so it's almost like it's better for him if the idea is actually it's not infinite and make money wherever you can i To try to take his side on this, like in the Dwarqish episode, he made the argument that like NVIDIA owning more of the actual stack within China would be good for the U.S. long term, that it would be like – it's kind of the old integration of economies is always going to be better.

it will keep the U.S. more directly involved in the overall Chinese technology stack and economy. So, I mean, that's his point. And maybe he believed it so much that he was, okay, that's going to be my trying to. Your pro-Jensen take of the week. That's going to be my trying to give Jensen. I think that's reasonable. Yeah. Kind of. Yeah. But the whole Dwarkesh interview was so weird that we obviously, we talked about it in the aftermath about how it didn't make sense. I even titled the episode Jensen on the ropes, which I thought was like, just kind of about as far as I could go without being reckless. But it turns out he was on the ropes. He was on the ropes. And my, my newsletter that week, this was in April this year was Jensen's puzzling logic. And it was puzzling. And it's now all coming out. So okay so that basically the situation that we find ourselves in where Jensen had not one not two but three affairs that we know about There might be more coming out because I think there that tweet if you find two ants in the kitchen the number of ants you have is generally not two

So we now know there's three. So, you know, three affairs. And, of course, the chip situation where he had funneled these chips. And ultimately, when you think about the demise or the fall of the CEO, you add that all up, and that's what you get. You get a board left with no choice but to fire him. Yeah, and let's just not forget affair number two. Affair number three, we're not fully sure of, but affair number two was direct report. Which you just can't do. You don't do that, at least in the United States, but traditionally. like you just don't do that and that's a fireable offense by the board no matter what so on all of that yeah i think the decision actually but do you still think it was shocking the speed with which he was pushed out do you think that was surprising of course you couldn't catch your even given all

the information that came out uh yeah i think so i i mean this happened you know obviously you know what must have happened was that he went to the board and they said, how many affairs have you had? And he said one. Then they found out he had two and everybody at NVIDIA seemed to know about it. And he had three. I mean, three after he was already resigned. But, you know, he was dead man walking at that point. See, that's where, I don't know, like the whole thing of is there a lot more to come out, obviously is the big question right now. But, I mean, you feel the board affair number two has to know. Even a fair number one, they probably know. Again, she was posting on WeChat, the VP of healthcare. There was a lot of, like, do you think everyone was completely in the dark in the board and no one knew any of this? Impossible. No, there was certainly a fair amount of knowledge within NVIDIA about this. And it is a sad end. There's no other way to look at it.

It's a sad end to the tenure of Jensen. But as I said at the beginning of the show, the affair is not the end of this story. It may be the middle or even the start. Because one of the things we're starting to learn from this whole story is that it's not that NVIDIA's business is shaky, because it's not. But maybe this Teflon person and this perfect company, they weren't exactly Teflon and they weren't exactly perfect. right that some stuff can stick to them and the imperfections despite you know this veneer of being this confident uh and unbeatable engine of the ai movement um it's possible that uh that it wasn't going to be a smooth ride anyway from here so when we come back after this we're going to talk a little bit about the competition coming for nvidia the potential holes in the business and what it means for AI moving forward. We'll be back right after this.

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Chief Digital Information Officer Russell Jukes. When you ask a question to somebody in your company, do you trust them? And what made you trust them? Do you trust but verify every single time? Russell and I discussed the challenges and opportunities of building production-grade AI and what it really takes to move beyond the hype. Check out the Big Technology Guide To Series presented by DXC Technology on my Alex Kantrowicz YouTube channel today. And we're back here on Big Technology Podcast Friday edition from Ranjan Roy of Margins. All right, Ranjan, there was a very interesting story in the Wall Street Journal, you know, that came out as this was all going down. The story is before his ouster Jensen Wang belittled the executive for replacing him where he basically called Kress the now CEO of NVIDIA, basically a reporting CFO, and said that she was like a deer in the headlights. It gets into a little bit of the sort of Kress management of Jensen that seemingly never came out but now is starting to trickle out.

But there were more details in this story about the business of NVIDIA that I think were even more interesting than the management style. So this is a little bit. I'll read a little bit from it. Jensen Wang summoned his top finance executives to his office this summer. He summoned Crest and his senior finance team to diagnose a ballooning problem. NVIDIA was in talks to provide billions of dollars of guarantees to companies that couldn't afford its chips. That included deals led by Wang's son-in-law, Nico Caprez, who had been offering upstart cloud providers and data center developers financing in the hopes of turning them into long-term customers. Wang had launched the deal-making spree and was now questioning whether it had gone too far. He went on to describe the situation the company was in. Major cloud providers were running away from NVIDIA, making plans to use alternative chips to lessen their reliance on the firm. Even worse, Wong said the vast supply of chip wafers and memory NVIDIA had committed to buying were coming at him like an avalanche.

So maybe what all wasn't all in good, and maybe like this very aggressive role that NVIDIA was playing in the industry that hadn't caught up with it was about to catch up to some degree. Your thoughts? I think, again, this story when I was reading it again, there's the kind of like human personal element of the belittling of the CFO. But I don't know, already then it jumps out, it's his son-in-law that's actually kind of like at the center of a lot of these financing deals. So I looked up and had some work in private equity and a Boston Consulting Group, but is still like mid-career to junior-ish, yet has been in trust with all this. So then you get into like just the overall structure of the company itself. But then the deals themselves, like every – this is, again, going to be one of those things I think we look back on. We've talked endlessly for a couple of years now about circular financing, But NVIDIA, you know, being the backstop, also selling the chips, also recognizing revenue by the vendor slash customer that is using those chips.

Like, we've all talked about it forever. That was part of this entire model. Again, I'm just looking, like, at a chart. Like, we forget all of this happened in the last three years for real. like uh the scale and speed of like a 1600 increase in the stock where it is today which is down what is it like 20 30 percent from its hot recent highs like this is all it happens so fast and so aggressively and these deals were kind of like that last push through here into the neoclutine NeoClouds, et cetera, into OpenAI as well. So I think that, like, the picture of how these deals actually played out and seeing this kind of behind-the-scenes stuff is going to start to definitely be one of the things that comes out more and more. But, yeah, but it also paints a picture of panic within the company, right? It's just like, yeah, we know that all these things on their face were a little weird, but you're brought into a meeting in this story, and Jensen's like, he's panicking.

Well, I like Tay Kim, who, if you follow, wrote a book on NVIDIA and a former Barron's journalist who definitely is pro-NVIDIA in his takes in general. It was funny seeing his take on it, though, but it was interesting. It was that apparently he said Jensen's management style is always presenting everything as panic and existential and then asking and pushing his team to realize and meet this challenge. So maybe it is that. Maybe I want to like – I don't want to ascribe that that was genuine panic Because those same deals you can see actually genuinely walking in with, like, pure confidence that, like, we're going to make this happen. All this stuff is happening now, but I need to motivate my team. Again, I'm trying to take the pro-genson side, at least in some of these. Someone has to this week, and I am taking that challenge.

Weird choice, Ronjan. Weird choice. Just like to be a little counterculture sometimes. Let me give, I think you might want to be with the culture this week. But anyway, who am I to moralize? Let me give you the counter argument here where this is actually a real problem. In this story, Jensen gave voice to, I think, the biggest issue here. He said, this is again from the story, major cloud providers were running away from NVIDIA, making plans to use alternative chips and lessen their reliance on the firm. Dylan Patel spoke about it this week. He did a podcast appearance. He said, NVIDIA is fighting an open AI chip team, a Broadcom chip team, a Google chip team, an anthropic chip team, a meta chip team. These guys are effing good. AMD. They're all really good. And it's not like they're incompetent. Basically, like, you know, Lisa Su is also in there. She's, you know, he's talking through like the fact that there is all this competition. And I think this is like this, you know, people are going to say what's NVIDIA in the aftermath of Jensen.

I think even with Jensen, this was going to be an issue, right? That we've seen the rise of all these alternative chip companies. They're building purpose-built for AI. And more importantly, AI is starting to make it much easier, ironically, to build on any chip. This was something I saw from the Anthropic Roadshow this week that I don't think was paid anywhere close to enough attention and might in and of itself have been the biggest story of the week if Jensen hadn't been pushed to resign or resign on his own. Okay, so Anthropic talked about how they had recently onboarded AMD GPUs. And with a traditional approach, they said it would take them 6 to 12 months to get their models working on AMD GPUs or their training, right? And this sort of goes to the moat that NVIDIA had, right? It wasn't just the chips.

And it isn't just the chips. It's the chips. It's the connectivity that they have between the chips. And then finally, it's the software, CUDA, that's used to program with the chips. and CUDA had been such an advantage for NVIDIA that it was just the way that AI researchers worked. And to try to use a different software at a moment where every minute and every run is so crucial would be basically damaging career-wise and damaging competitive-wise. Well, Anthropic in this roadshow said the AMD GPUs, which they just onboarded, again, they used to take 6 to 12 months to onboard with Mythos, right, which is basically one of their models connecting, you know, writing up the software to make it happen. They were able to onboard in about three days. So this massive leap and this massive burden to be able to use anybody else but NVIDIA has become erased with AI.

And you think about it, it's like the SaaSpocalypse, right, where like AI makes all software undifferentiated might be on its way for NVIDIA itself and for CUDA. I don't think anyone has been talking about that, and I think this panic that Jensen had within that meeting was well-founded, and Anthropics Roadshow just backed it up. What are you, Chippocalypse? It's Chip Softwarepocalypse. Chip Softwarepocalypse. But it's a big deal. No, no, I agree. we will workshop the name, but I agree it's a very big deal. Again, I'm still going to take anything with a grain of salt that is being presented about anthropic information this week and next in terms of what is kind of being, again, like, it's very good timing in terms of kind of highlighting that fact, but it's true. Again, we've been talking about this for a while, that there is going to be diversification of chips and, like, the technology

running over them in terms of what is trading models. And I think it is very interesting here that, and it's nice marketing that they're saying using their own AI, they were able to actually improve the way they approach this. But I still don't think, again, that wasn't a, maybe he was recognizing this problem a few months ago, but I still don't think that is at the center of at least what was, what was happening to NVIDIA. But yes, there is competition. Competition is good. I think that is a pretty firm thing. Right. No, I don't think this was the core problem that made Jensen just do all these things that he's now been fired for, but it was a problem for NVIDIA. And when you think about what, again, if we're talking about this firing being the beginning or middle of the story and not the end, one of the questions is, well, what happens next? and we're at this incredible inflection point where some of the competing chips are now able to get up to speed faster with AI.

They also have great teams. And by the way, the recruiters for these companies are going to be on the phone with people at NVIDIA. To NVIDIA's, maybe not the leadership, but some of their top talent who, you know, might really enjoy a promotion. To be like, you know, you are someone who's been, you know, in this position for a couple of years. Maybe you have the ability to advance with an NVIDIA. Maybe you don't. Certainly, the company is unstable right now. Well, we here at AMD have a promotion for you. We have a much more stable company with a CEO who's probably not going to get involved in any of the shenanigans that Jensen did. And we're going to give you an ability to make a real impact on a product you care about and a company that is ascendant. Do you want to join? Why don't you just come have lunch with us, and then you decide whether you want to be a part of this And if you want to go back to NVIDIA sure no problem That was an incredible recruiter pitch I think I might be an expert in honeypotting

but I think Alex has shown that when it comes to recruiting unparalleled, I'm in, I'm in. Where do I sign? But I do like the idea that, I mean, it is important. The cultural impact on NVIDIA as a company, I mean, we actually haven't even discussed that. We've only discussed kind of the macro factors affecting them. But the internal cultural impact, I think, probably will be real. Though, I think there was a petition of like 1,600 people who had signed to saying like to reinstate Jensen within the company. And you can imagine there's a lot of very loyal people. But once they get to Cantor's recruiting pitch, it will be hard for them to say no. Right. I mean, it just takes a few, right, a few really talented people to go to these labs who they never would have picked up the phone. They never would have left NVIDIA with Jensen there. They might go. And then you could see greater competition. And I already think it was heading that way because of the advances in AI software,

and now even more. And then the question is, all right, well, what is it going to mean for the U.S. AI labs? I have an opinion piece in the New York Times today about the impact. And the headline is, Jensen Wang is gone good. And basically, the argument that I make is that Jensen's technology was obviously foundational to the ability of OpenAI and Anthropic and others to be able to build these excellent AI models. But he was also the most effective advocate for getting these chips to China. And with Jensen gone, that advocate is gone. And the Chinese labs that were breathing down the neck of American AI are going to have much more trouble keeping up than they would have with Jensen in place. So whereas some are like this is the end of American AI or a big problem for them, I would say there's a good chance that they end up seeing this as a blessing.

because when you think about what's made the AI within China so good, it's obviously the researchers. It's obviously like part of it is distillation. But knowing what we know now, a huge part of it is their access to NVIDIA chips. And if that goes away because we see more export controls or NVIDIA as a policy, no longer tries to subvert them or advocate as staunchly against them, than if you're OpenAI, if you're Anthropic, and if you're Google, all of a sudden those Chinese competitors that you were worried about look a lot less fierce. You didn't tell me you had an opinion piece in the New York Times today. That's quite a flex here, dropping your own article into our prep doc and leaving us there. We're 50 minutes in, so I feel like it's a fine time. All right. I think it's a little – and it is very relevant in this case. And I do think that – okay, this question of is it good – because the allocation of chips, the allocation of money –

I mean, I've been speaking with people who have been talking about, like, rotating out of NVIDIA into Anthropic. So does this, what does this mean for, especially I feel, and OpenAI was definitely more intertwined overall, both financially and like infrastructurally with NVIDIA, Anthropic less so. But I don't know, like I still worry. There is this part of me, I have to say that like, is this going to centralize and concentrate power among the two labs and then provide more direct control? And I know that like leans conspiracy theory, but the one thing I will give, again, I'm turning this into a pro Jensen podcast here, but like the open, at least pushing open source in general. And hopefully, and it's interesting, like, one, will the hugging face acquisition end up closing is going to be interesting because it doesn't actually close till the spring. But, like, the other, the proponents of open source within the U.S. as competitors to the two biggest labs, I think it's going to, that is actually going to be really interesting to see the way it plays out.

Yeah. Think about this stat. I have this in the story. You know, about a year ago, Chinese models were like 4% on open router. Although, who knows how much open router was actually being used. But their competency has grown a lot, right? Now, they're 57% to 67%. At least that was the number in one week in September. Take everything else aside. If you think about the empowerment or the competitiveness of OpenAI and Anthropic, If you're going to be competitive, that number needs to go down. And one way to do it is, you know, limit the chips going into China. And there's a secondary benefit, which is that if the chips don't go to China, they go to you, assuming you want them. And then we're really going to see the true demand of GPUs here. But that should be, you know, if you're Dario, who has clashed with Jensen, or if you're Sam, you could look at it as a blessing that he's out. I think they do

I think they certainly well Sam again they were allied with Nvidia for sure no no I mean as a $105 billion backstop there was supposed to be $300 billion and that apparently in that Colette Kress article that she had pushed back against and that they have there's more financial at stake but also let's remember Nvidia is supposed to be a $10 billion anchor investor in the IPO next week do they stay that? Like, I don't know. An Anthropics IPO. I think they will. An Anthropics IPO. I mean, they almost have to for themselves, which is a reminder of the circular nature of all this. But I do think that this is unquestionably good for Anthropic and OpenAI. I think unless the whole thing comes crumbling down and then it's not. But at least in a purely tactical sense, it is good for both of them. who's going to be the successor now uh this is from the wall street journal of jensen wang

doesn't believe in succession planning it's become a big risk for nvidia uh the co-founder and co has said he doesn't believe in succession planning and also has said he hopes to cultivate the next generation of leaders so there could be many potential successors well uh didn't have as much time as he thought with uh 60 direct reports wang ran the company with a flat structure saying leaders should continuously pass on knowledge and information as they have it. So, you know, he's out. Suddenly, they don't know who's going to replace him. Kress takes over. It doesn't seem like she's going to be the next CEO. And so you go to Calci and you look at the odds for at least a signal for who's going to be the next CEO. Though, of course, you know, we have complicated feelings about these prediction markets here on the show. Especially in the context of news. Yes. Yes, but anyway, we'll just use it as a reference point. Actually, Rene Haas, the CEO of Arm, is being floated as the number one candidate to replace Jensen.

And that's flipped because yesterday he was number three. Number two is Ian Buck from NVIDIA, and CollectCress is number three. So this movement is interesting. I mean, maybe it is Rene Haas. I thought maybe it will be Tim Cook, but John Gruber shot that down. Zero chance he'd want the job. If he wanted to be CEO of a Fortune 2 company, he'd still be CEO at Apple. Apple hates NVIDIA, and NVIDIA hates Apple. The two companies deeply dislike each other. Cook is surely enjoying the saga right from where he is and will remain Apple's boardroom. So I guess the Cook dreams are gone, but that's what the succession looks like. See, I think the succession planning is going to be even more complicated by the fact that if you are an external candidate like Rene Haas or whoever else is being considered, you have to be waiting to figure out exactly what is going on. Like you don't want to walk into something that is far messier than you're being sold. So I think it's going to be internal, whether it's Ian Buck or whoever else,

because I just can't imagine if you are the CEO of Arm or some other massive company, And again, as exciting as this opportunity must be, you clearly understand something is up. You at least want to see it calm down and settle down and play out a little bit more. So I think it's going to be internal. I think Rene Haas would be a great choice. Now, I wonder where Jensen will end up. Now, this is probably the end of his career, but there's two places that I think could be interesting. One is I will not rule out the possibility that he will return as NVIDIA CEO. I'll say I'm, albeit with a bigger break, although I think that's the chances seem more and more remote with every passing day. But I wouldn't be stunned. Do you think there's a chance that he goes to work with Elon on the TerraFab? Zero Hedge tweeted, Elon, please hire Jensen. And Elon Musk wrote, that would be an honor. And we know Elon is good at hiring competent CEOs and giving them room to work.

And it could potentially be like Jensen's, I wouldn't say revenge against NVIDIA because, well, it's his fault. But, you know, a potential second act for him. See, we are not in 2024 and 2025 anymore. Like, I can't stress this enough. I know I said this earlier, but, like, things are going to be different in terms of, like, how all this stuff operates and plays out. So, like, again, the kind of fun idea of Elon Musk hiring Jensen, I don't know. It's fun, but I definitely do not see that happening in any way. And I think Elon's going to have a lot of other stuff to be thinking about over the next few months. Okay. Like merging SpaceX and Tesla. Yes, that's what it's for sure. Yeah. I think we should end with a tiny bit of leather jacket discourse if you're up for it.

The chatter on the Internet has been that Jensen made the leather jacket cool and then uncool pretty rapidly. My favorite meme on this is from someone named Alex Yablon. Jensen, leather jacket discourse reminds me of the time two years ago when I wore my beloved moto jacket to a party and my good friend said, great jacket, sorry you got divorced. I, I, I, have I commented on the show? I've been commenting on the leather jacket for a while now, but again, in, in terms of a different environment, maybe I like was, I'm not going to go at him hard on it, but I mean, certainly on the kind of midlife crisis affair thing, it certainly feels like a tell, especially in hindsight. But I want to take the position that corporate executives, if you lead multi-trillion dollar companies, don't wear a leather jacket. You don't need to wear like a suit, but just a leather jacket. It's just trying to be something.

You're not a rebel. You're not an outcast. You're not like riding a motorcycle and living life to the limit. You're, come on, you're. Making GPUs, bro. You're making GPUs. You're filing 10 Qs and Ks and hosting boardroom meetings. No more leather jackets, people. Put them away. All right. Before we go, just going back to the question I asked at the beginning, now that we've talked this through, how surprised actually are you? Because it seemed like you weren't very surprised. And where do you think this story goes from here? I remain not surprised. And I think, I mean, I still do think this is going to be the beginning of a much larger, I don't want to say unwinding, but at least complication for the AI trade and story. going forward. And again, I think Anthropic, I think they're going to have a good IPO next week.

I think like everything I'm hearing, it's like there's still a lot of positive sentiment flowing into it. But NVIDIA and especially that kind of circular financing, which we talked about, and the whole idea of the central bank of the AI trade, there is something to a lot of that. And I think this is just, as you said it well, like China is now a genuine threat. It's One of the few issues that people are actually bipartisan on, AI itself has not done itself any favors, and this isn't helping in terms of its own branding. So, like, I think this is the beginning of a volatile number of months. Okay, and I will take the other side just to end it from my perspective. Very interesting stat. NVIDIA's stock has been hammered this week, but for all the talk of key man risk and how if Jensen goes, so goes AI, it doesn't seem like the market believes that. In fact, on the most devastating week for the second biggest company in the entire world, the S&P 500, which is tech and AI dependent, is up.

What can you say? I mean, that's what I'm saying. I can't give a timeline, but to me, the market has not digested this with any significance. And I think the Anthropics IPO will probably give a nice short-term boost as well. But this just fundamentally changes the way the last two to three years worked, in my opinion. OK, well, obviously, this won't be our last discussion on this. We also have the Anthropic IPO coming up next week. You and I will obviously talk about it next Friday, going over what happened as Anthropic hit the public markets. And for our listeners and viewers, we have a big week coming up. We are going to have one of my conversations from Web Summit coming up on the feed. And then we're also going to have, which I somehow made it out of Lisbon before the massive storm that shut the whole city down. Thank goodness. But we also have Gary Marcus coming on talking about why the Anthropic IPO will fail. That's coming up next week.

And then we'll also have Aaron Levy, the CEO of Vox, coming on talking about why Anthropic will succeed on the public markets. So you're going to get a lot of episodes next week. No lack of news. this is for all intents and purposes it's our Super Bowl this period of time that we're in I don't think we'll have a more newsworthy moment in the history of the show and we plan to meet the moment here so Ranjan thank you again for coming on the show I was looking forward to this all week every time something happened I was like I can't wait to speak to Ranjan about that I can't wait to speak to Ranjan about it the audience was like we need our honeypot correspondent on the double official title putting it on LinkedIn end. Exactly. So thank you for entering the bell. Great speaking with you as always. All right. See you next week. See you next week. Thank you everybody for listening and watching and we'll see you next time on Big Technology Podcast.