Sonnenfeld now sees 80-20 odds against Huang at Nvidia

Nvidia ↗ 4.96% has run under one chief executive for its entire 33-year history. With its board now investigating Jensen Huang's affair with a woman suspected of working for Chinese intelligence, analysts and governance experts are openly discussing who could take his place. Most of them say there is no obvious answer.

Huang has said he has more than 60 direct reports, a structure that keeps him at the center of nearly every decision, and the plan for replacing him is unclear, the Associated Press reported. Reuters Thomson Reuters Corporation ↗ 0.05% noted that Huang, 63, has dozens of direct reports and no obvious successor. "Jensen is Nvidia," Harvard Business School professor David Yoffie told the AP, adding that the board has "almost no good options".arkansasonline.com+1

Names in the mix

Dan Ives of Yorkville Ives & Co. told Newsweek that "there is no succession plan," and he named Chief Financial Officer Colette Kress as a possible interim CEO. Analyst Dave Altavilla pointed to Ian Buck as a longer-term internal candidate. He called Arm ↗ 13.81% CEO Rene Haas, a former Nvidia executive, an "intriguing external possibility". Speculation has also included co-founder Chris Malachowsky, who is now a senior technology executive at the company.newsweek.com+1

The board has said it still has confidence in Huang. It has also said it has no reason to believe national security or company secrets were compromised. Ives wrote that investors are pricing in about a 15% chance that Huang is removed.arkansasonline.com+1

Calls for governance changes

In an opinion column for MarketWatch News Corp ↗ 0.34%, David Weidner argued that Huang should stay but that Nvidia needs "an independent chair, a public succession plan and a bench of executives investors can name." He contrasted the company with Apple ↗ 1.89%, which signaled its leadership transitions well in advance. Jay Aldebert of International Services Inc. said the board could stop short of removing Huang. Its options include an independent chair above him or "a formal number two".marketwatch.com+1

Odds turning against Huang

Yale's Jeffrey Sonnenfeld first rated Huang's chances of survival at "about a 50-50". He has since lowered that estimate sharply. "Now, I think those odds should be reduced to 80-20 against him surviving," he told CNBC-TV18 Network18 Media & Investments Limited. He listed the CFO and the chief operating officer as possible internal successors, and former Apple CEO Tim Cook and former Google CEO Eric Schmidt as outside options.techcrunch.com+1

The uncertainty has hit the stock. Shares fell more than 4% on Monday, November 9, and about 5.5% on Tuesday, November 10. A shareholder has also sued, accusing the company of misleading investors. As Aldebert put it, "The problem is not the affair. It is the vacuum around the man".arkansasonline.com+1