Nvidia CEO Jensen Huang resigns as CFO Colette Kress steps in and the board stays silent

The most important sentence in Nvidia‘s announcement is the one it leaves out. The board accepted the resignation of the man who built the company, put its finance chief in charge and named a chair for the first time in its history. It did not say why Jensen Huang is leaving, and it did not say what its own investigation found.

That silence is now the story shareholders have to price. For days the question was whether the chipmaker at the center of the AI boom could afford to lose its founder. The board has answered that one. What it has not answered is what it knew, when it knew it, and why a company of this size had so little structure in place to absorb the loss of one person.

What the board announced

In a statement on Thursday, Nvidia’s board said Huang had resigned as president, chief executive and director, effective immediately. Colette Kress, the company’s chief financial officer since September 2013, will serve as interim chief executive while keeping her finance role, and the board will consider internal and external candidates for the permanent job. Before Nvidia, Kress spent nearly 25 years in finance at Cisco and Microsoft.

The board also appointed Harvey C. Jones, a former chief executive and executive chairman of Synopsys, as its first-ever chair. “The Board has full confidence in Colette and the leadership team, and we expect the company’s operations, customer commitments and product roadmap to continue without interruption,” Jones said. The release thanks Huang for his “immeasurable contributions” and ends there. As VideoCardz noted, it gives no reason for the departure and no findings from the independent investigation the board opened on November 8.

A week that ran ahead of the board

The sequence matters, because the board spent most of it reacting. Huang acknowledged an extramarital affair in a company-wide email and apologized to his wife and children without naming the other party, CNN reported. The admission followed New York Times reporting on his relationship with a woman US authorities concluded was a Chinese intelligence asset, according to Fortune. Beijing has denied the espionage claims.

The board then said it would investigate whether Huang had been the target of a foreign intelligence effort, adding that it had “no reason to believe that either national security or NVIDIA secrets were compromised.” On Wednesday, the New York Times reported a second relationship, this time with an Nvidia executive who reports to him. The board met late that night, and the Wall Street Journal reported that directors were preparing to remove him before the company confirmed anything, according to CBS News.

CNN has put the accountability question bluntly: did Huang mislead his board, or did Nvidia and its board keep investors in the dark? The same outlet reported, citing two people familiar with the matter, that the FBI raised concerns with lawmakers nearly a year ago. Thursday’s release does not address either point.

The market priced the governance, not the chips

Investors delivered their verdict before the board did. Nvidia had shed more than $300 billion in market value during the week, CNN reported, and the shares fell about 10% in premarket trading after the announcement. Nvidia makes up just over 6% of the S&P 500, so the slide reaches far beyond chip investors.

The detail worth reading is how the analysts cut. Bernstein’s Stacy Rasgon downgraded Nvidia to Market Perform from Outperform and halved his price target to $200 from $400, according to investingLive, but left his earnings forecasts untouched, saying demand for AI chips remains very strong. He cut the valuation multiple instead, to about 12.7 times fiscal 2028 earnings, and wrote that Bernstein may not yet fully understand how deep the issue goes. Baird cut the stock to Neutral with a $200 target, down from $500, and Morgan Stanley also stepped back. In other words, the brokers are not marking down Nvidia’s business. They are marking down the confidence that anyone knows who runs it, and how it is overseen.

“There is not a ready replacement for Huang and it’s hard to overstate just how important he is for the company, so we assume a material derating (of the stock) based on his ousting,” Neil Wilson, a strategist at Saxo, wrote in a note cited by CNN. Dan Ives of Yorkville Ives had estimated that a forced exit could cost Nvidia $1 trillion in market value.

A structure built around one man

Fortune’s reporting earlier in the week laid out why the exit cuts so deep. Nvidia has no chief operating officer, and Huang had about 60 direct reports. The company has operated without a chief compliance officer. In 2022, Securities and Exchange Commission staff asked for more detail on board risk oversight and whether it had such an officer. Nvidia has said compliance is handled by a committee made up of its chief financial officer, its head of operations and its senior human resources executive. By that description, the new interim chief executive was one of the three people charged with keeping the company inside its own rules.

Huang held 3.56% of the company and no super-voting shares, which is why the board could act at all. But it had no chair until Thursday and no successor it had prepared the market for. “The board has made a mistake by not having a clearly outlined succession plan that’s been telegraphed to the market for a year or two,” Jason Schloetzer, an associate professor at Georgetown University who studies CEO succession, told Fortune.

The precedent hanging over the next phase comes from McDonald’s. It fired chief executive Steve Easterbrook in 2019 over a relationship with an employee, later found further undisclosed relationships, sued to recover his exit pay and ultimately clawed back cash and equity valued at $105 million, Fortune recalled. Nvidia’s release says nothing about Huang’s exit terms.

What happens next

Nvidia will report third-quarter fiscal 2027 results on Tuesday, November 17, as previously scheduled, with the call at 2 p.m. Pacific time. Kress will present the quarter less than a week into the top job, as both chief executive and chief financial officer. Huang has said in the past that he hoped his successor would come from inside the company, and the board’s search now formally includes outsiders.

The numbers on Tuesday will answer the question the brokers say they are not worried about. The one they are worried about, what the investigation found, now sits with Harvey Jones, and his first statement as chair did not mention it.

Tags: nvidia, Jensen Huang, semiconductors, Colette Kress, Harvey Jones