# NVIDIA CEO Ouster and AI Chip Export Risks

**Podcast:** Big Technology Podcast
**Published:** 2026-11-14

## Transcript

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.
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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 Wang, 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.
Ranjan, 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.
As 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 Kress 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, a 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 this 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 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 overlook, 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 3am.
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.
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 whatever it means for him at a personal level, whatever it meant for his hour-to-hour going-ons versus what this means.
Because again, the memes have gotten well into that.
I genuinely feel horrible for his wife and family.
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 in and of itself, and I explained some of the problems with that 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 bans 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 Wang.
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, Ms.
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 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 US.
on frontier AI you want to be ahead so you can defend versus you know have to chase there and uh and it seems like just from these reports you just read the headline assuming they're accurate Jensen Jensen was completely disregarding them uh 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 were was an asset to Chinese intelligence You just 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 Dwarck-ish, which will now go down in history.
What did he say?
Like, we are not a car.
You're not talking to- 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 percent of revenue is related to these chips.
A lot of them, we're 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 naught 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.
But NVIDIA's legal leadership had such sway.
that they apparently were able to get their nose into the U.S.
government and switch 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, once now that we know the full story, it's improper on the highest level.
We do not know the full story, my man.
There is so much.
Now that we know as much of the story as we do, it's improper on the highest level.
Yeah.
Okay.
Okay.
Well, 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 NVIDIA.
Have you seen this?
Can we all just agree?
It's NVIDIA.
NVIDIA.
That's right.
Let's just say it.
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 had a, didn't he throw a punch at Lutnik once or something?
Like, finally he's having another moment of going after Howard Lutnik.
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 yes yes 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 is 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 chip maker'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.
So it switched.
to the headquarters versus building location.
And the story says subsequent to disclosure disclosures recasting prior period results indicated that Nvidia reclassified the bulk of Singapore billed revenue as US 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's fair to say, well, why didn't you pick up on that before?
Sort of, you know, sort of beside the point at this point in the story.
This is bad.
No, no.
See, this specific story, I'm 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.
All of this was out in the open a year ago.
And I genuinely think like the, it shows how different the world is today versus a year ago that no one picked up on it.
No one, no one in the, like, and I actually even wonder, like, do you think, were there reporters who actually were pitching like, oh, I came up with something and editors were just like, eh, 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.
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 hugging 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, everyone was like, well, AI is, you know, not so good.
Can't, you know, 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'd 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 Gentsman was even out around and he called 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.
I mean, 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, it's 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.
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 bet 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.
That basically makes sense.
No, no, but I want to push back.
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 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 two 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 it's, this is what actually mean 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, I think, yeah, I think you can read it for what it is.
And let's let's just let's 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 40.
So he was very deeply involved in 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 Ant 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, yeah, Minimax M3 built on Blackwells.
uh ant groups ling 3.1 flash built on blackwells there was there were not supposed to be access to these chips uh within china and i think dylan patel from semi-analysis even responded and said you can just look at the code it's clear that these models were built for blackwells which is like uh from everything we know now it seems like uh nvidia was you know at best careless uh 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, we all, like 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 Megaspeed.
We'll get into it.
I mean, we already discussed it.
Alice Wong, all that.
And then what are they going to do with those chips?
Train DeepSeek and Moonshot and Minimax.
So I think that part, I don't know.
I've not even seen anyone questioning that that is what was happening.
So 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 uh guys enough that j 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 our 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, okay, 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 like, you know, 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?
Like, for instance, for instance, CollectCrest, 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.
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 Besant, 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 this morning.
Ranjan, you asked a question that I don't think we should just 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 US 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 it's 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 maybe they they were looking for chips.
I don't know.
It's really difficult to sort of.
wrap your head around it but but me but it has opened up this question for me about whether um whether there actually is as much gpu demand as as we're led to believe i 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.
To try to take his side on this, like in the Dwarqish episode, I do.
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 integrate.
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 was his that's his.
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 get 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 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's 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's 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 like...
That's when you when you think about the demise of or the fall of a CEO, you add that all up and that's what you get.
You get a board with left with no chance but to fire, but to fire no choice but to fire him.
Yeah.
And let's just not forget affair number two and affair number three.
We're not fully sure of, but affair with number two was direct report.
Like again, 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, but 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 breath this week before another headline.
Even given all the information that came out.
Yeah, I think so.
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.
Then he had three.
I mean, three after he was already resigned.
But, you know, he was he was a 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 affair number one, they probably know.
Again, she was posting on WeChat, the VP of health care.
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 about it.
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.
That some stuff can stick to them and the imperfections, despite this veneer of being this confident and unbeatable engine of the AI movement, it's possible that...
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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Rewe.
Dein Markt.
And we're back here on Big Technology Podcast Friday edition with Ranjan Roy of Margins.
All right, Ranjan, there was a very interesting story in the Wall Street Journal, you know, that came out in the, as this was all going down.
The story is before his ouster, Jensen Wang belittled the executive for replacing him, where he like basically called Colette Crest, the now CEO of NVIDIA, basically a reporting CFO and said that she was like a deer in the headlights, like.
gets into a little bit of the, you know, sort of crass management of Jensen that like 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 Kress and a senior finance team to disdiagnose 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 Boston Consulting Group, but it's still like.
mid-career to junior-ish, yet has been in trust with all this.
So then you get into just the overall structure of the company itself.
But then the deals themselves.
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, 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 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% from its hot recent highs?
This is all, it happens so fast and so aggressively.
And these deals were kind of like that last push through here into the 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 work 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 this 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 could 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, Ranjan.
Weird choice.
I 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 OpenAI 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, Lisa Su is also in there.
He's talking through 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 six to 12 months to get their models working on AMD GPUs or their training.
Right.
And this sort of goes to the the moat that NVIDIA had.
Right.
It wasn't just the chips.
It's 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 like 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, you know, damaging career wise and damaging competitive wise.
Well.
So 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 Sasspocalypse, 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?
Hardware?
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 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 were um you are someone who's been you know in this position for a couple of years um maybe you have the ability to advance within 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 stable with a ceo who's probably not going to get involved in any of the shenanigans that jensen's did jensen did and we're going to have give you an ability to make a real impact on a product you care about and a company uh that is 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 you know be a part of this and if you want to go back to nvidia sure no problem that was an incredible recruiter 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 USAI 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.
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 like some are like this is, you know, the end of American AI or a big problem for them, you know, I would say there's a good chance that they end up, you know, seeing this as a blessing because, you know, 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, you know, no longer tries to subvert them or advocate as staunchly against them, then 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 out that it was yours.
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 US as competitors to the two biggest labs, I think it's gonna, that is actually gonna 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 percent.
At least that was the number in one week in September.
Take everything else aside.
If you think about the empowerment of 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, Nvidia is the backstop.
They were allied with Nvidia, for sure.
No, no, I mean, as a $105 billion backstop, that was supposed to be $300 billion.
And that apparently in that Colette Kress article that she had pushed back against and that they have, like, 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.
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 open AI.
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, this is from the Wall Street Journal.
Jensen Wang doesn't believe in succession planning.
It's become a big risk for NVIDIA.
The co-founder and CEO 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, didn't have as much time as he thought.
With 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 Kalshi and you look at the odds and, you know.
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, but let's continue.
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 Colette Cress 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, a la Sam, 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.
I can't stress this enough.
I know I said this earlier, but things are going to be different in terms of how all this stuff operates and plays out.
So 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.
I think like merging SpaceX and Tesla.
Yes, that's for sure.
Yeah.
I think we should end with a tiny bit of leather jacket discourse if you're up for it.
There's the chatter on the internet has been that Jensen made the leather jacket cool and then uncool in the pretty rapidly um my favorite favorite uh meme on this is uh from someone named alex uh 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 did i've i have i commented on the show i've been commenting on the leather jacket for a while now.
But again, in terms of a different environment, maybe 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 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, 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?
Look, 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.
Okay, 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 Box, 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.
It's putting it on LinkedIn.
Exactly.
So thank you for answering 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.
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