Jensen Huang Ousted By Nvidia Board As CEO

0:05 >> BLOOMBERG TECH IS LIVE FROM THE HEART OF SILICON VALLEY WITH ED LUDLOW. AT: -- ED: JENSEN HUANG HAS RESIGNED AS THE CEO OF NVIDIA FOLLOWING REVELATIONS OF TWO AFFAIRS, ONE WITH A WOMAN U.S. OFFICIALS SUSPECTED OF SPYING FOR CHINA AND AMID AN INDEPENDENT BOARD INVESTIGATION INTO IT. SHARES OF NVIDIA OFF THEIR SESSION CLOSE. THE STOCK ON TRACK FOR THE BIGGEST ONE-DAY DROP SINCE JANUARY, 2020 FIVE.

0:45 INVESTORS ARE CONFRONTING A QUESTION THAT BARELY -- 2025. INVESTORS ARE CONFRONTING A QUESTION THAT BARELY EXISTED. CHAIR. JOINING IS NOW IS BLOOMBERG'S IAN KING, WE HAVE HEARD FROM THE CFO.

1:19 IAN: THE SITUATION, AS IT STANDS NOW IS JENSEN HUANG HAS NOTHING TO DO WITH THIS COMPANY OR THE COMPANY HE FOUNDED. THIS IS SOMETHING WE HAVE BEEN NOTING HERE. THERE HAS BEEN SPECULATION HE MIGHT BE ABLE TO STAY ON IN SOME KIND OF ROLE OR POSITION. NVIDIA WILL BE FACING A LOT OF INCOMING, AS WILL JENSEN HIMSELF, FROM POLITICIANS, GOVERNMENT AGENCIES, THAT WANT TO KNOW NOT JUST ABOUT THE PART -- PERSONAL SCANDAL, BUT THE BEHAVIOR OF NVIDIA AS A COMPANY IN TERMS OF WHAT IT MAY OR MAY NOT HAVE DONE.

2:10 ED: I HAD LINE HAS JUST BROKEN. JENSEN LONG -- A HEADLINE HAS JUST BROKEN. JENSEN HUANG HAS AGREED TO TESTIFY TO LAWMAKERS. IN THE BOARD STATEMENT, WHAT DID THEY EXPLAIN ABOUT THE LONG-TERM AND WHERE THEY WILL LOOK FOR SUCCESS WHEN IT COMES TO JENSEN HUANG? EN: --IAN: BECAUSE CHRIS IS THE INTERIM CFO.

2:48 NOW, AS YOU ARE PUTTING UP THE GRAPHIC, THE SEARCH IS ON. REPLACING JENSEN HUANG, THE CEO OF WHAT UNTIL RECENTLY WAS THE WORLD'S MOST VALUABLE COMPANY, WILL BE DIFFICULT. THEY WILL HAVE TO GO AFTER THE BIGGEST NAMES IF THEY STAND A ALL THIS. ED: THEY HAVE JUST SAID JENSEN HUANG WILL NOT HAVE ANY ROLE WITH NVIDIA GOING FORWARD.

3:24 IAN KING, THANK YOU VERY MUCH. THERE IS REACTION TO THE UPSIDE AND DOWNSIDE ALL OVER THE PLACE. ANALYST DOWNGRADES KEPT POURING IN OVER AN IDENTITY THIS MORNING ON NVIDIA SPECIFICALLY. WHAT DO WE SEE ON THE SELL SIDE? QUOTES THERE IS A GREAT DEAL OF UNCERTAINTY ABOUT THE NEXT STEPS FOR THE COMPANY.

3:56 ALL THE ANALYSTS AND INVESTORS I HAVE SPOKEN TO SAY THAT THE FUNDAMENTALS REMAIN INTACT AND OUTLOOK, SHORT-TERM, IS SOLD OUT FOR 2027. THAT MIGHT BE WHY WE ARE SEEING THE STOCK PAIR BACK LOSSES TODAY. THEY HAVE LOST THEIR MAJOR HYPE MAN AND A HUGE AMOUNT OF INSTITUTIONAL SUPPORT FOR HIM. THERE IS MORE OPTIMISM ABOUT THE COMPANY'S OVERALL FUNDAMENTALS. ED: HOW IS THE MARKET PSYCHOLOGY CHANGING? AND IF THEY ASK THE QUESTION WHAT IS NVIDIA WITHOUT JENSEN HUANG, THE OPPORTUNITY FOR FRAUD COM, AMD, AT GOOGLE BUSINESS? RYAN IT THEY MIGHT BE ABLE TO CAPITALIZE ON SOME OF THE GOINGS AT NVIDIA TO ITS OWN BENEFIT.

4:59 THIS IS A COMPANY THAT HAS SEEN STRONG GROWTH RELATED TO AGE AND A I. WITH DATA CENTERS AND SO FORTH THAT DOES REPRESENT A BIG OPPORTUNITY. THESE COMPANIES THAT COULD BE BENEFITING AMID THE TURMOIL OF NVIDIA. THERE IS SO MUCH VOLATILITY GOING ON IN THE CHIP SPACE NOW. PEOPLE ARE TRYING TO GET AROUND WHAT THIS MEANS FOR THE OVERALL OUTLOOK FOR AI, AI SPENDING.

5:39 WHO WILL END UP BENEFITING? WHAT WILL THIS MEAN FOR MARKET SHARE? SO MUCH IS UP IN THE AIR? ED: THE NEWS IS JENSEN L -- JENSEN HUANG HAS RESIGNED AFTER TWO AFFAIRS, ONE WITH A WOMAN U.S. OFFICIALS SUSPECT IS SPYING FOR CHINA. THERE IS NO UPDATE ON THAT INVESTIGATION. THE GOVERNMENT AGENCIES ARE INVESTIGATING IN PARALLEL, BUT THERE IS NO UPDATE ON THAT.

6:14 JENSEN HUANG HIMSELF SAID THIS ONE MONTH AGO. >> YOU HAVE TO HOLD YOURSELF RESPONSIBLE. YOU HAVE AGENCY. YOU ARE THE CEO OF THE COMPANY, FOR GOD SAKE. YOU HAVE TO HAVE HIGH STANDARDS AND EXPECTATIONS. I AM RESPONSIBLE FOR AN ENTIRE INDUSTRY. THE PRESSURE OF BEING THE CEO IS HIGH AND IT IS SUPPOSED TO BE HIGH. THIS SHOULD NOT BE A JOB YOU TAKE FOR GRANTED.

6:46 ED: WE WILL HAVE THAT INTERVIEW LATER IN THE PROGRAM. JOINING US IS A PORTFOLIO MANAGER AT FRANKLIN TEMPLETON. IN THE PORTFOLIO OF LOTS OF COMPANIES IN THE AI ECOSYSTEM JUST TO START A REACTION TO JENSEN HUANG'S RESIGNATION, PLEASE. >> THIS HIGHLIGHTS THE IDEA BEHIND KEY MAN RISK. AS INSTITUTIONAL INVESTORS, WE ARE ALWAYS EVALUATING THAT, HOW WE LOOK AT BOARDS, THEIR GOVERNANCE COMMITTEES, HOW THEY ARE LOOKING OUT PLANNING FOR EVENTS LIKE THIS. THE BOARD HAS TO ACT IN THEIR BEST INTEREST OF SHAREHOLDERS. THIS IS SOMETHING THEY HAVE HAD TO TAKE ACTION ON HERE. WE ARE SEEING THE RESULTS OF THAT. ED: COLLETTE KRESS BECOMES CEO.

7:46 >> THE BUY SIDE AND THE SELL SIDE KNOWS COLETTE VERY WELL. SHE HAS BEEN WITH THE COMPANY OVER 13 YEARS. YOU JUST SHOWED HER BACKGROUND. SHE HAS BEEN AT MICROSOFT, TEXAS INSTRUMENTS, CISCO. SHE KNOWS THE INDUSTRY. SINCE THE 90'S, SHE HAS BEEN IN THE INDUSTRY. NVIDIA. SHE HAS BEEN A GREAT HAND WITH UP. ED: HER COMMAND OF THE TECHNOLOGY. SARA: SHE HAS ALL THAT.

8:28 I THINK SHE IS MEETING WITH OTHER COMPANIES AND PARTNERS IN THE SPACE. HER AS AN INTERIM CEO TODAY IS A VERY GOOD POSITION FOR THE COMPANY NOW AS WE FIGURE OUT THE FUTURE. ED: THE BOARD SAID THEY WILL WE CAN TALK ABOUT THAT. THE OTHER MECHANICAL CHANGES HARVEY C JONES BECAUSE -- BECOMES NVIDIA'S FIRST BOARD CHAIR. JENSEN WAS CEO AND DIRECTOR.

9:02 HE HAS BEEN THERE SINCE 1993. IS IT THAT MATERIALLY IMPORTANT TO YOU? SARA: THAT IS IMPORTANT. HE IS WELL-KNOWN IN THE VALLEY. HE HAS RELATIONSHIPS THERE. IT IS A MOMENT FOR NVIDIA. IT IS AN IMPORTANT MOMENT FOR THEM TO IDENTIFY THE NEXT LEADER OF THE COMPANY. TO THAT END, YOU HAVE TO LOOK AT ANALOGS TO THIS. THERE ARE OTHER COMPANIES THAT HAVE LOST LEADERS WITH THIS KIND OF HIGH-PROFILE. APPLE IS A GOOD EXAMPLE.

9:38 A PLATFORM BUILT OR INNOVATED UNDER THAT CEO AND ULTIMATELY CARRIED THROUGH 15 YEARS LATER AS AN EXTREMELY GOOD BUSINESS WITH THE IPHONE. HERE WE HAVE A PLATFORM THAT IS GENERATIONAL, WHAT THEY HAVE BUILT HERE. FORWARD. ED: I HAVE TO ASK ABOUT THE PRESIDENT OF THE UNITED STATES. YOU PUT OUT THIS MORNING ON TRUTH EXPOSURE, HE ACKNOWLEDGED JENSEN HUANG AT RESIGNED.

10:12 I WILL READ THIS TO YOU -- HAD RESIGNED. "THERE IS ONLY ONE MAN TO TAKE HIS PLACE. TIM COOK OF APPLE. A LEGEND REPLACES A LEGEND TALK" -- A LEGEND." KRESS --SARA: THAT WOULD BE A REALLY SHORT RETIREMENT FOR HIM, UNFORTUNATELY. TIM, WE HAVE HEARD REPORTS HE HAS BEEN APPROACHED. HE HAS VERY STRONG RELATIONSHIPS BOTH HERE AND GLOBALLY. THAT MIGHT GIVE INVESTORS CALM. THERE ARE INVESTORS IN NVIDIA THAT WE HAVE MET WITH OVER THE YEARS.

10:57 ED: PEOPLE TALK ABOUT INTERNAL AND EXTERNAL CANDIDATES. EN BUG. LET'S ZOOM OUT FOR CLARITY. FRANKLIN TEMPLETON, THE BIG INVESTOR OF NVIDIA ACROSS FUNDS. YOU INVEST PRIMARILY IN THIS MASSIVE ECOSYSTEM OF COMPANIES THAT RELIES ON NVIDIA COMPUTE, RELYING ON JENSEN HUANG'S LEADERSHIP IS AN ENTIRE FIELD. DO YOU HAVE CONCERN ABOUT THAT GROUP OF PRIVATE TECHNOLOGY COMPANIES NOW?

11:30 SARA: WE HAVE TO SET ASIDE JENSEN AND HIS ROLE IN THE ECOSYSTEM. THERE ARE MANY LEADERS IN THIS CATEGORY. THERE ARE MANY LEADERS DRIVING AI AND SUPPLY AND DEMAND. WE HAVE SEEN DEMAND FOR AI CONTINUES TO BE STRONG. WE WILL START TO SEE THAT DIFFUSE INTO THE REST OF THE ECONOMY. IT POINTS TO THE FACT THAT THE MARKET WAS HEAVILY CONCENTRATED IN A FEW KEY PLAYERS. YOU HAVE SEEN THAT IN INDICES ALREADY. THERE IS A LOT OF CONCENTRATION IN THESE KEY PLAYERS. WE NEED TO SEE THAT DIFFUSE TO THE REST OF THE ECONOMY. I THINK THE FRONT TIER LABS COMING PUBLIC AND HAVING THAT TYPE OF -- FRONTIER LABS COMING PUBLIC AND HAVING THAT TYPE OF OWNERSHIP, AND OTHER PARTS OF THE ECONOMY, DIFFUSING INTO HEALTH CARE, FINANCIAL SECTORS, POINTS TO THE BROADENING OF THE MARKET AND THAT WILL ULTIMATELY GOOD -- BE GOOD FOR THE HEALTH OF THE MARKET.

12:27 ED: YOU ARE AN INVESTOR IN AN TOPIC. I AM ON THE FENCE ABOUT ENDING OUR CONVERSATION ON A TOPIC. THERE IS NOTHING TO SUGGEST ANYTHING CHANGES, REALLY. THE DATA POINT EVERYBODY IS LOOKING AT IS, DOES THIS TO CHANGE THINGS FOR THE HYPER SCALARS? NO. SARA: WHY SHOULD IT? DEMAND IS STRONG IN TERMS OF AI. MAYBE THE NEWS FROM LAST WEEK WITH THE MIDTERMS AND POLITICAL HEADWINDS, MAYBE YOU SEE A SLOWDOWN OF BUILDOUT. MAYBE YOU HAVE PERMITS TAKING LONGER TO ACHIEVE. ULTIMATELY, AT THE END OF THE DAY, DEMAND IS QUITE STRONG. ED: I AM GRATEFUL TO HAVE YOU BACK ON THE SHOW. IT IS A BIG MOMENT IN TECHNOLOGY INDUSTRY HISTORY. COMING UP, MORE ON NVIDIA AND LOWS. DOWN ABOUT 4% IN A MOMENT.

13:39 THIS IS BLOOMBERG TECH. ED: JENSEN HUANG RESIGNED AS CEO OF NVIDIA. THE COMPANY IS GOING FORWARD WITH THEIR EARNINGS NEXT TUESDAY AFTER THE MARKET CLOSE. THIS STOCK OPENED DOWN MORE THAN 14%, THE BIGGEST ONE-DAY DROP SINCE JANUARY 2025, DOWN ABOUT FOUR PERCENTAGE POINTS. THERE IS A REACTION FROM ALL OVER THE WORLD. I WANT THE REACTION OF BLOOMBERG INTELLIGENCE. MANDEEP SINGH JOINS US.

14:34 MANDEEP: I THINK THIS WILL HAVE STRATEGIC RAMIFICATIONS IN TERMS OF NVIDIA IS ROLLED BACK STOPPING A LOT OF THESE DEALS AND CIRCULAR FINANCING AND HOW THEY WERE AGGRESSIVE WITH FINANCING THE AI BUILDOUT. OBVIOUSLY, THEY WERE A MAJOR BENEFICIARY OF THAT IN TERMS OF THE MARGINS NVIDIA HAD. INVESTMENT WAS HUGE IN TERMS OF THE FINANCING ASPECT. WHY WAS NVIDIA SUCCESSFUL WITH THAT AI BUILDOUT? BECAUSE OF SUPPLY RELATIONSHIPS. I FEEL LIKE JENSEN LEAVING NVIDIA, YOU WILL SEE THOSE SUPPLY RELATIONSHIPS GET REDEFINED IN TERMS OF HOW TSMC TREATS OTHER CUSTOMERS BESIDES NVIDIA WITH HOW THEY RAMP UP ACCELERATOR CHIPS.

15:25 THAT IS HOW SOMEBODY LIKE GOOGLE AND BROAD, AND HAS A GREAT CHANCE OF INCREASING ALLOCATION. WE KNOW THAT TPU SYSTEMS ARE BEING USED OUTSIDE GOOGLE CLOUD NOW. THAT LINE OF BUSINESS COULD BENEFIT A LOT HERE. USING A HEADHUNTER TO FIND AN EXTERNAL CANDIDATE TO REPLACE JENSEN AND THERE WOULD BE AN INTERIM CEO. THIS WAS BEFORE THE CONFIRMATION. YOU HAD THIS REACT OUT ON THE TPU.

15:57 THERE IS A PRICE ADVANTAGE THAT TPU HAS. EXPLAIN THIS HE SAYS. MANDEEP: WE KNOW NVIDIA HAS 75% GROSS MARGINS BECAUSE THERE ACCELERATOR CHIPS ARE MOST EXPENSIVE. WHEN YOU COMPARE THAT TO HER TPU SYSTEM THAT GOOGLE AND BROADCOMM WILL SELL TO ANTHROPIC DROP IT IS MUCH LOWER COMPARED TO NVIDIA.

16:34 IF THEY ARE LOOKING TO RAMP UP THE TPU SYSTEMS, SOMEBODY LIKE ANTHROPIC CAN USE TPUS IN A BIG WAY, IN THEIR OWN DATA CENTERS OR GOOGLE CLOUD. THE PRICE ADVANTAGE THAT GOOGLE HAS WITH TPU PRICED MUCH LOWER THAN NVIDIA COULD BE A HUGE FACTOR IN TERMS OF OTHER ENTERPRISES OR MODEL PROVIDERS LOOKING TO USE TPUS. ANTHROPIC HAS A SLIDE IN THEIR ROADSHOW. IT IS A HUGE THING IN THE CONTEXT OF HOW LOCKED IN THE NVIDIA STACK WAS WHEN IT CAME TO TRADING AI WORKFLOWS. ED: I POSED THE QUESTION, WHAT IS NVIDIA WITHOUT JENSEN HUANG? IS IT BRI CHANGING ANYTHING IN ITS AGGREGATE OUTLOOK BECAUSE OF THIS?

17:35 MANDEEP: WE ARE LOOKING TO LOWER OUR 2027 CAPEX MEMBERS SLIGHTLY. DOWN ALTOGETHER. WITH THE BLUE WAVE COMBINED WITH AGGRESSIVE. HYPER SCALARS WON'T BE AS AGGRESSIVE IN THEIR NOW GIVEN WHAT IS HAPPENING WITH NVIDIA. ED: IF YOU ARE A TERMINAL CLIENT, GO READ IT. COMING UP, MORE ON NVIDIA. AGAIN, A BIG HOLDER OF THE STOCK HAS BIG QUESTIONS TO ASK -- ASK. THIS IS BLOOMBERG TECH.

18:26 ED: JENSEN HUANG HAS RESIGNED AS CEO OF NVIDIA. AT THE MARKET OPEN, THERE IS A REACTION. TWO HOURS INTO THE SESSION, THE STOCK IS DOWN 4%. IT WAS DOWN 14%. THERE IS A LOT WE DON'T KNOW. A LOT OF ANALYSTS HAVE DOWNGRADED THE STOCK. WHAT DO INVESTORS THINK? LET'S BRING IN BRIAN MOWBRAY WITH $32 BILLION IN ASSETS. THERE WAS AN IDEA THAT CIRCULATED OVER THE LAST 24 HOURS THAT THE BOARD SHOULD HAVE PUT THIS TO A SHAREHOLDER VOTE. WHAT WOULD YOU HAVE DONE?

19:11 >> I WOULD HAVE LIKED TO SEE QUICKER RESPONSE FROM THE BOARD IN TERMS OF SOMETHING LIKE THAT. WE NEEDED MORE FROM THEM IN TERMS OF A RESPONSE. INSTEAD THEY WENT DARK WITH THEIR MEETING. EVERYBODY WAS SHOCKED BY THE NEWS, AND THERE IS A LOT GOING ON, BUT THIS IS SUCH A VALUABLE COMPANY, LITERALLY, WITH ITS MARKET WEIGHT IN DRESSY S&P 500, WE WOULD HAVE LIKED TO SEE A RESPONSE MORE QUICKLY.

19:42 YOU CAN'T PLAN FOR THINGS LIKE THIS TO HAPPEN. I THINK JENSEN HAS MADE THE RIGHT STEP IN MAKING DECISIVE ACTION AVAILABLE TO THE PUBLIC AND NOW WE ALL HAVE TO REACT TO THAT FROM WHERE WE ARE AT THE MOMENT. ED: THE HIGH-LEVEL IMPACT OF THIS ON THE AI TRADE. IN MATERIAL TERMS, NVIDIA HAS A NEAR MONOPOLY ON A TECHNICAL BASIS. DOES THE TRAJECTORY OF THE BUILDOUT CHANGE BECAUSE JENSEN LEAVES THE COMPANY?

20:16 BRIAN: OUR VIEW WAS EARNINGS GROWTH FOR NVIDIA NEXT YEAR WOULD BE NORTH OF 60%, 63%. I THINK FUTURE GROWTH GETS REPRICED LOWER, MAY BE BY AS MUCH AS HALF, WITHOUT A JENSEN'S ABILITY TO DIRECT WHAT HAPPENS NEXT. THE INNOVATION THAT COMES FROM THE COMPANY IS INCREDIBLY TIED TO HIS ABILITY TO LEAD AND STRATEGIC VISION GOING FORWARD. THE GROWTH RATE STARTS TO SLOW. SHORT TERM, WE HAVE NOT SEEN CUSTOMERS BRCA 1. THE BACKLOG IS LIKELY TO STAY INTACT IN TERMS OF 2027 REVENUES.

21:01 FUTURE GROWTH IS AT RISK FOR NVIDIA, THE BIGGEST THING WE ARE PAYING ATTENTION TO. ED: WHAT IS THE POLICY RISK HERE? THERE ARE GOVERNMENT AGENCIES LOOKING AT THE RELATIONSHIP JENSEN HUANG HAD WITH AN ALLEGED SPY FOR CHINA WHETHER THERE ARE NATIONAL SECURITY OR TRADE WHAT HAPPENS? BRIAN: THE RANGE OF OUTCOMES FROM THE INVESTIGATION IS INCREDIBLY WIDE.

21:35 YOU ARE TALKING ABOUT NATIONAL SECURITY IMPLICATIONS BASED ON THE ACTIVITY, IF HE WAS A WILLING OR COMPLICIT ACTOR, OR IF HE WAS PREYED UPON BY A TALENTED SPY. PLACE. KRESS --ED: BLOOMBERG HAS REPORTED ALICE WONG IS IN BEIJING.

22:10 COMING UP, NVIDIA SHARES ARE UNDER PRESSURE. SOME OF THE PRESSURE HAS EASED. JENSEN HUANG HAS RESIGNED AS CEO OF THE COMPANY AMID EXTRAMARITAL AFFAIRS. MORE ON THE MARKET FALLOUT WHEN WE GET BACK. IT'S HALFTIME HERE ON BLOOMBERG TECH IN THE BEAUTIFUL CITY OF SAN FRANCISCO. THANK YOU FOR BEING WITH US.

22:53 ED: SHARES OF NVIDIA ARE WAY OFF A DRAMATIC MARKET OPEN. AFTER THE MARKET OPENED, ABOUT AN HOUR AFTER NVIDIA CONFIRMED JENSEN LONG HAS RESIGNED AS CFO -- CEO AND THAT COLLETTE KRESS WILL BE INTERIM CEO, WE STAND DOWN 4.5%, A DRAMATIC CHANGE FOR THE PSYCHOLOGY OF THE MARKET. AS JENSEN HUANG IS BEING OUSTED, LAST MONTH HE SPOKE WITH EMILY CHANG ABOUT THE PRESSURE OF BEING CFO. LISTEN TO THIS.

23:38 JENSEN: THE PRESSURE IS HIGH AND IT IS SUPPOSED TO BE HIGH. THIS SHOULD NOT BE AN EASY JOB. IT SHOULD NOT BE A JOB YOU TAKE FOR GRANTED. WHEN I DECIDED TO BEAT CEO, I DID NOT REALIZE THE MAGNITUDE OF THE PRESSURE AND FOR. NOW THAT MY FAMILY AND ALL THE PEOPLE NEAR ME SEE THE RESPONSIBILITY OF THE JOB AND WHAT IT TAKES, THEY HAVE TO ASK THEMSELVES WHETHER THAT SAYS THE LEVEL OF SACRIFICE AND RESPONSIBILITY YOU WANT.

24:15 I AM HOPING THE NEXT CFO OF THE COMPANY IS ALREADY AT THE COMPANY. 20 YEARS FROM NOW I HOPE I STAY HEALTHY AND CONTINUE TO EARN MY KEEP. STILL LONG AS I DO THAT, 20 YEARS FROM NOW, I HOPE THEY ARE ALREADY HERE. BUT I HAVE TO EARN IT. ED: THAT INTERVIEW WAS A MONTH AGO, OCTOBER 14. TODAY JENSEN HUANG HAS RESIGNED OVER A SCANDAL INCLUDING MULTIPLE MARITAL AFFAIRS, INCLUDING ONE WITH AN ALLEGED CHINESE SPY. THAT CONVERSATION WAS WITH EMILY CHANG, THE HOST OF THE CIRCUIT ON BLOOMBERG ORIGINALS.

24:54 HE WAS TALKING ABOUT HIS DAUGHTER AND SON AND SON-IN-LAW. REFLECT ON THAT PART OF THE CONVERSATION. IT WAS ABOUT SUCCESSION. EMILY: THE QUESTION WAS ABOUT HIS DAUGHTER. THERE WERE MULTIPLE REPORTS SHE COULD BE HIS SUCCESSOR. SHE WAS WITH HIM EVERY STEP OF THE TRIP. WE WENT WITH THEM FOR FOUR COUNTRIES IN FOUR DAYS. SHE WAS THERE EVERY DAY.

25:26 WHEN WE WERE WAITING FOR HIM, MANY TRACK -- MULTIPLE TIMES SHE WOULD HAVE THE CATERERS BRING OUT FOOD AND DRINKS FOR THE PRESS. EVERYBODY WAS EXCITED ABOUT THAT. IT GOES TO THE POINT THERE WAS NO OBVIOUS SUCCESSOR TO HIM INSIDE THE COMPANY, GIVEN HOW HE RAN THE COMPANY SO UNCONVENTIONALLY. THIS SETS UP A VERY BIG DILEMMA. ED: I REVIEWED THE PART OF THE INTERVIEW WHERE HE SAYS THAT THE COMPANY BEING SET UP THAT WAY WITH JENSEN FROM THE TOP AND 60 DIRECT REPORTS, THAT IS WHY IT HAS BEEN SUCCESSFUL. TALK ABOUT THAT.

26:07 EMILY: HE WAS THE GUY AT THE CENTER OF THE AI BOOM. HE IS THE ONLY PERSON THAT HAS EVER RUN THIS COMPANY. I THINK THEY WILL NEED TO TALK ABOUT GOVERNANCE ISSUES IN GENERAL AND HOW THE COMPANY HAS BEEN ARCHITECTED, ESSENTIALLY, FROM THE GROUND UP. IT TAKES ON A NEW MEANING NOW. EVERYWHERE WE WENT HE WAS HOLDING COURT WITH DEVELOPERS.

26:39 THERE WERE LINES OUT THE DOOR AND AROUND THE BLOCK, NOT JUST FOR HIM, BUT NVIDIA, HOLDING COURT WITH WORLD LEADERS, THE PRESS. THIS WAS A GUY, AND I HAVE HEARD THIS TERM USED MANY TIMES IN THE LAST 48 HOURS, HE HAD THE WANTED. IT'S TRUE, THEY MAKE THE BEST AI CHIPS ON THE MARKET. WE SAW HOW DEEPLY HE IS INVOLVED WITH THESE RELATIONSHIPS, WITH EVERY SINGLE COUNTRY, WITH POLICYMAKERS. WE WENT TO FRANCE, TO THE U.K., TO SWEDEN, TO GERMANY. YOU HAVE TO THINK ABOUT HOW A LOT OF THOSE RELATIONSHIPS ARE POTENTIALLY COMPROMISED.

27:29 ED: WHAT IS NVIDIA WITHOUT JENSEN LONG -- JENSEN HUANG? YOU ASKED HIM ABOUT THE RELATIONSHIP BETWEEN NVIDIA AND THE U.S. GOVERNMENT. JENSEN: IT IS NOT MY JOB TO AGREE OR DISAGREE. THE DECISIONS WE MAKE IMPACT NOT JUST AMERICAN CITIZENS, THE PROSPERITY OF OUR FUTURE, IT IMPACTS THE WORLD. IF EVER I HAVE AN OPPORTUNITY TO HELP HIM MAKE A BETTER DECISION, WHATEVER THEIR DECISION IS, WHETHER IT SERVES ME, OR IS COUNTER TO MY INTERESTS IS NOT MY CONCERN. IT IS ONLY MY CONCERN I HAVE AN OPPORTUNITY TO INFORM HIM. 100%, THAT IS HOW I FEEL.

28:19 AND: NVIDIA HAS SAID A LONG TIME THAT NVIDIA IS AMERICAN COMPANY. HE HAS SAID CHINA IS CRITICALLY IMPORTANT. TALK TO ME ABOUT THAT PART OF THE CONVERSATION? >> WHEN YOU THINK ABOUT THE RELATIONSHIP HE HAS DEVELOPED WITH THE PRESIDENT OVER THE LAST YEAR, THE LAST COUPLE YEARS, WE ARE LOOKING AT THIS THROUGH A NEW LENS. HE MADE THE SAME ARGUMENT WAS THAT HE HAS MADE FOR MANY YEARS. WE SHOULD SELL THE MOST ADVANCED U.S. CHIPS TO CHINA BECAUSE ALL OF CHINA WILL BE DEVELOPING ON OUR CHIPS AND WE WILL BE EMBEDDED IN THEIR ECOSYSTEM. BECAUSE IF WE DON'T, THEY WILL DEVELOP THEIR OWN CAPABILITIES AND THAT WILL BE BAD FOR THE USAID ECOSYSTEM. MY UNDERSTANDING IS THAT GENERAL NVIDIA POLICY, WE SHOULD KEEP SELLING CHIPS TO CHINA.

29:17 AND IF THERE ARE NATIONAL SECURITY IMPLICATIONS, IT IS A BIGGER DEAL. ED: HEADLINES FROM SEMAPHORE ON THE SCREEN. EMILY CHANG, THANK YOU SO MUCH. CATCH THE FULL CONVERSATION ONLINE OR TONIGHT ON BLOOMBERG ORIGINALS AT 8:00 P.M. EASTERN TIME, 5:00 PACIFIC. COMING UP, WE LOOK AT THE LEGAL QUESTIONS FACING JENSEN HUANG AND NVIDIA WITH A FORMER DOJ PROSECUTOR.

29:48 THERE IS A REPORT OUT FROM SEMAPHORE OF MULTIPLE JUSTICE DEPARTMENT PROBES, INCLUDING NVIDIA AND SOME OF THOSE IN ITS SUPPLY CHAIN. WE WILL BRING YOU THE DETAILS. THIS IS BLOOMBERG TECH. >> HE LIED ABOUT THE AFFAIR WITH THE CHINESE SPY.

30:19 WHAT ELSE IS HE NOT TELLING US? WE ARE CONCERNED ABOUT WHAT THIS SPOT LEARNED. ABOUT WHETHER JENSEN HUANG KNEW ABOUT THE POTENTIAL DIVERSION OF HIGH-END NVIDIA CHIPS FROM MEGA SPEED. THESE ARE VERY CONCERNING CIRCUMSTANCES. WE NEED ANSWERS RIGHT AWAY. AND COAT -- ED: HE SAID CONGRESS COULD SUBPOENA JENSEN HUANG IF HE DOES NOT AGREE TO TESTIFY. 40 MINUTES AGO WE GOT CONFIRMATION FROM THE REPUBLICAN PARTY THAT JENSEN HUANG HAS AGREED TO TESTIFY TO LAWMAKERS. NVIDIA FACES MULTIPLE JUSTICE DEPARTMENT PROBES ACCORDING TO A REPORT FROM SEMAPHORE THAT NAMED SUPERMICRO. I WANT TO GET TO WASHINGTON WITH BLOOMBERG'S MIKE SHEPPARD. LET'S START WITH SEMAPHORE, THE BASICS, BUT WE ARE SEEING. MIKE: THEY DID NOT GO INTO A GREAT DEAL OF DETAIL THAT THEY DESCRIBE THREE PROBES.

31:29 ONE WAS INTO NVIDIA. IN SPECIFIC ABOUT WHAT THE NATURE OF THE INQUIRY IS. TWO OTHERS, MEGA SPEED AND SUPERMICRO, AND THE INVOLVEMENT OF ALICE HUANG, JENSEN HUANG'S PARAMORE, WHO IS, ACCORDING TO OUR OWN REPORTING, IN CHINA, IN TEACHING WITH KNOWLEDGE OF THE GOVERNMENT THERE. -- BEIJING WITH THE KNOWLEDGE OF THE GOVERNMENT THERE. IT RAISES QUESTIONS ABOUT HER KNOWLEDGE OF THOSE TWO COMPANIES. SUPERMICRO, WE HAVE SEEN SENIOR OFFICIALS AND THE FORMER COFOUNDER OF THE COMPANY FACE CHARGES FOR ALLEGEDLY TAKING PART IN A SCHEME TO DIVERT AI CHIPS THROUGH SOUTHEAST ASIA TO CHINA IN VIOLATION OF EXPORT CONTROLS. OF COURSE, MEGA SPEED IS FACING WE WILL HAVE TO WATCH FOR FURTHER DETAILS.

32:30 THE SEMAPHORE REPORT SAYS PROSECUTORS ARE PREPARING FOR, OR LOOKING FOR CHARGES NOW AGAINST NVIDIA OR JENSEN FORM -- JENSEN HUANG. ED: JENSEN HUANG RESIGNED AS CEO THIS MORNING. HE DISCLOSED HE HAD AN AFFAIR AND HE WOULD HAVE AN EXTERNAL INVESTIGATION BY THE BOARD. THE REVELATION OF MULTIPLE AFFAIRS AND THE ONE SPECIFICALLY TIED TO AN ALLEGED CHINESE SPY, ALICE HUANG.

33:03 BLOOMBERG REPORTED LAST NIGHT ALICE HUANG IS IN CHINA. GOVERNMENT. CHINA HAS REJECTED WHAT WE HAVE HEARD FROM A MEDIA REPORTS THROUGH U.S. OFFICIALS, THE SUSPICION SHE HAD BEEN ACTING AS A CHINESE INTELLIGENCE AGENT FORMING THE RELATIONSHIP WITHJ JENSEN HUA.

33:40 NG IT RAISES ALL SORTS OF QUESTIONS. WHAT INFORMATION COULD SHE HAVE BEEN SHARING? NVIDIA DOES NOT BELIEVE, FOR NOW, THAT ANY SENSITIVE COMPANIES OR NATIONAL SECURITY INFORMATION HAS BEEN EXPOSED. THERE ARE INVESTIGATIONS UNDERWAY BY THE JUSTICE PREPARING FOR LAUNCH. JENSEN'S APPEARANCE BEFORE THE COMMITTEE IN THE MATTER OF A WEEK OR SO IS JUST THE BEGINNING. WE CAN EXPECT DEMOCRATIC LAWMAKERS, WHEN THEY TAKE THE GAVEL ON CAPITOL HILL IN EARLY JANUARY, THEY WILL START ASKING FOR JENSEN AND OTHER NVIDIA EXECUTIVES TO APPEAR AS WELL. ED: SUNDAY THE BOARD SAID IT HAD NO REASON TO BELIEVE THERE WAS NO NATIONAL SECURITY OR COMPANY SECRET RISK BASED ON THAT INVESTIGATION.

34:38 THIS MORNING IN THE STATEMENT ABOUT JENSEN HUANG RESIGNING, THERE WAS NO UPDATE. LET'S GET MORE ON THE LEGAL QUESTIONS THAT REMAIN FOR NVIDIA AND THE FORMER CEO. WITH THE DOD NATIONAL SECURITY DIVISION, SHE SERVED AS AN ATTORNEY IN THE CIA'S COUNTERINTELLIGENCE CENTER. WELCOME TO THE PROGRAM. IT IS IMPORTANT TO STICK TO BASICS HERE. THE QUESTION, IN ANY INVESTIGATION, ABOUT JENSEN HUANG AND THE AFFAIR HE HAD WITH AN ALLEGED CHINESE SPY, WHAT WILL THEY BE LOOKING OUT?

35:32 >> I WANT TO START BY SEPARATING THE COUNTERINTELLIGENCE SIDE OF INVESTIGATION. THEY ARE UNDOUBTEDLY HAPPENING IN PARALLEL HERE. THE COUNTERINTELLIGENCE SIDE THEY WILL LOOK AT WHO, WHERE, WHEN, WHY, HOW? WHO WAS SHE COMMUNICATING WITH? DO WE KNOW WHEN HER RELATIONSHIP WITH THE CHINESE GOVERNMENT STARTED? THEY WILL BE LOOKING AT ANY COMMUNICATIONS ON THE CLASSIFIED SIDE BETWEEN JENSEN AND ALICE. WE CAN ASSUME ANY OF THOSE COMMUNICATIONS AND ANY INFORMATION THAT JENSEN MIGHT HAVE PASSED ALONG TO HER MAY BE PASSED ALONG TO THE CHINESE GOVERNMENT. IT IS NAÏVE TO THINK THEY WOULD NOT TRY A PHYSICAL ACCESS OPERATION INTO HIS DEVICES.

36:27 EVEN IF THIS WAS NOT THE PRIMARY OBJECTIVE, THE IDEA THAT SHE MAY HAVE BEEN IN A ROOM, WITH HIS COMPUTER, WITH HIS PHONE, THAT IS VERY IMPORTANT. IT IS SOMETHING THE BOARD NEEDS TO CONSIDER, TO YOUR POINT A MINUTE AGO. ANYTHING ON HIS COMPUTER OR PHONE, IF I WAS THE COMPANY, I WOULD ASSUME THAT INFORMATION HAD BEEN COMPROMISED. ED: THERE IS A DIFFERENCE, IS THERE NOT, BETWEEN THE ACTION AND INVESTIGATION AGENCIES MIGHT TAKE, AND THE POLITICAL APPETITE FOR THEM TO DO SO? DURING THIS PROGRAM WE HAVE SPENT A LOT OF TIME THINKING ABOUT HIS ROLE SPEAKING WITH GOVERNMENTS AROUND THE WORLD, PARTICULARLY, PRESIDENT TRUMP.

37:19 IS IT THAT FACTORED IN IN CIRCUMSTANCES LIKE THESE? >> IN TERMS OF BRINGING CHARGES, YOU MEAN? ED: THE APPETITE TO DO SO. >> IN THIS ADMINISTRATION, WE HAVE SEEN THE APPETITE CAN CHANGE BASED ON ECONOMIC INTEREST, POLITICAL INTERESTS. THERE ARE SIGNIFICANT GEOPOLITICAL INTERESTS HERE THAT COME INTO PLAY. THAT WON'T STOP THE DOJ FROM CONDUCTING AN INVESTIGATION.

37:52 IT MIGHT DEPEND ON PUBLIC OUTCRY. IT MIGHT COME DOWN TO WHAT COMES OUT IN THE INVESTIGATION, BEFORE CONGRESS, OR OTHERWISE. BUT THERE ARE A RANGE OF CRIMINAL CHARGES HERE. PARTICULARLY AGAINST MEGA SPEED AND ALICE HUANG THAT COULD BE AT PLAY HERE. POTENTIALLY, AND WE DON'T KNOW AT THIS STAGE WHAT ROLE JENSEN HUANG MAY HAVE INADVERTENTLY PLAYED IN THE EXPORT CONTROL VALUATION. LET'S SAY HE TOOK ACTION TO AVOID HAVING NVIDIA LOOK MORE CLOSELY AT THE COMPANY.

38:39 YOU GET INTO POTENTIAL AIDING AND ABETTING TERRITORY. CONSPIRACY. THE THRESHOLD IS SLIGHTLY HIGHER. WE DO NOT KNOW WHAT COMMUNICATIONS HE HAD WITH HER. WE DON'T KNOW WHAT COMMUNICATIONS ARE REFLECTED IN THE CLASSIFIED COLLECTION THEY HAVE, AND WHAT THE DOJ MIGHT GET FROM SEARCH WARRANTS. TO THE EXTENT IT SHOWS CULPABILITY FOR HIM AND WHAT HE MIGHT HAVE BEEN DOING TO PREVENT FURTHER INQUIRY INTO MEGA SPEED, OR TO FACILITATE TRANSACTIONS. I DON'T THINK YOU CAN RULE OUT THERE COULD BE CRIMINAL CULPABILITY FOR HIM.

39:19 IN EFFECT, THE COMPANY, BECAUSE OF HIS ROBE WITH THE COMPANY. ED: THE NVIDIA BOARD IS CONDUCTING AN INTERNAL INVESTIGATION, THAT WE KNOW, RIGHT? THAT IS PUBLIC. THAT IS OUT THERE. INDEPENDENT OF INVESTIGATION. IT IS INTERESTING, WHAT JENSEN HUANG MAY HAVE INADVERTENTLY DONE. WILL THE AGENCIES THAT LOOK TAKE INTO ACCOUNT THE FINDINGS OF THE BOARD IN THEIR OWN INVESTIGATION WHEN IT COMES TO NATIONAL SECURITY TRADE SECRETS, ETC.? >> I THINK THEY WILL CERTAINLY PRESENT TO THE DEPARTMENT OF JUSTICE, AND IF IT IS APPROPRIATE, THE DOJ TYPICALLY TAKES THOSE FACTORS INTO CONSIDERATION. IN MY EXPERIENCE, YOU CAN GET SO MUCH MORE FROM CRIMINAL PROCESS, SEARCH WARRANTS, SUBPOENAS, DOCUMENTS, INFORMATION FROM HER PHONE IF THEY ARE ABLE TO GET A SEARCH WARRANT ON THAT. THE COMPANY WILL NOT NECESSARILY HAVE INSIDE. I WILL SAY, WHILE THE COMPANY'S INTERNAL INVESTIGATION FINDINGS MAY HELP POSITION THE COMPANY FOR SOME KIND OF COOPERATION CREDIT, TO THE EXTENT THEY HAVE EXPOSURE, THE DOJ WILL CONDUCT ITS OWN INVESTIGATION, AND ULTIMATELY MAKE A DECISION ON HOW TO PROCEED BASED ON A NUMBER OF FACTORS, JUST ONE OF WHICH IS WHAT THE COMPANY IS DOING.

41:02 ED: THANK YOU FOR YOUR TIME ON BLOOMBERG TECH. JENSEN HUANG'S RESIGNATION HAS NOT STOPPED THE BLEEDING FOR NVIDIA SHARES, BUT THE DROP IS NOT AS SEVERE AS IT WAS BEFORE THE MARKET OPEN. MOVERS TO THE UPSIDE, NVIDIA'S APPEARANCE. THIS IS BLOOMBERG TECHNOLOGY. >>SHARES OF NVIDIA ARE DOWN SHARPLY.

41:33 THE MARKET OPEN SAW A DROP OF 14%. THIS HAS RIPPLE EFFECTS. WE GET TO BLOOMBERG'S CONNOR REINEKE. WHAT ARE WE SEEING ON THE SUPPLY CHAIN? >> WE ARE SEEING WINNERS ON THE OTHER SIDE OF THE NVIDIA TRADE. SHARES ARE DOWN ABOUT 5%. ON THE FLIPSIDE, SHARES OF BROAD, AND A&E ARE UP AND BOOSTING THE MARKET. IT IS RARE TO SEE NVIDIA DOWN IN THE S&P 500. WE ARE SEEING INVESTORS FLOCK TO THE COMPANIES THAT COULD FILL IN THE GAPS FOR NVIDIA.

42:17 WITH SOME POTENTIAL SHAKEUP IN LEADERSHIP GOING FORWARD. ED: NVIDIA DOWN 5%. IT HAD BEEN DOWN 14% WHEN THE MARKET OPENED. >> THERE MIGHT BE SOME -- A CUSHION. POTENTIALLY, THE BOTTOM TO FALL OUT WAS NOT AS MUCH AS WE ARE SEEING. WE HAVE SEEN A RETAIL STRONGLY BUYING THE DIP IN NVIDIA, GIVING IT SOME SUPPORT. STILL DOWN 5%.

42:56 >> THE U.S. IS PROBING IS ALICE HUANG HELPED SMUGGLE SUPERMICRO PRODUCTS. THIS IS FROM BLOOMBERG. THE U.S. IS LOOKING INTO ALICE HUANG AND HER BRAWL IN SMUGGLING SUPERMICRO PRODUCTS. JENSEN HUANG RESIGNED AS THE CEO OF NVIDIA. HARVEY JONES, WHO HAS BEEN A BOARD DIRECTOR SINCE 1993, BECOMES THE COMPANY'S FIRST-EVER BOARD CHAIR. THE BOARD IS LOOKING AT INTERNAL AND EXTERNAL CANDIDATES. JENSEN HUANG AGREED TO TESTIFY AND SPEAK BEFORE CONGRESS IN THE COMING WEEKS.

43:46 NEWS. WE RECAP EVERYTHING, NVIDIA INVESTORS, REPORTING. THIS IS BLOOMBERG TECHNOLOGY.