Nvidia's Interim CEO Was Once Mocked By Jensen Huang On AI Financial Deals

Nvidia's outgoing CEO Jensen Huang reportedly once made fun of Colette Kress, who has now taken over as the company's interim chief executive officer. Huang called Kress "a deer in the headlights" during an office meeting in August. 

The meeting was attended by Nvidia's senior finance team, according to a report by The Wall Street Journal (WSJ).

Huang had called them to discuss the company's growing financial deals with AI cloud companies and data centre developers. These companies were looking for financial help to buy Nvidia's expensive chips.

According to the WSJ report, quoting people familiar with the meeting, Huang interrupted Kress while she was giving a presentation. He called her a "reporting CFO" and said she could not help him make business plans or take important decisions.

Huang was worried that Nvidia had promised too much money to other companies. He pointed out that major cloud companies were now looking at other chips and trying to reduce their dependence on Nvidia. He also described the large stock of chip wafers and memory that Nvidia had agreed to buy as an "avalanche".

Before she took over as interim CEO, Kress also questioned Nvidia's financial deals.

According to WSJ, Jensen Huang's son-in-law, Nico Caprez, and another company executive, Raj Mirpuri, had approached several AI companies with offers of financial help. Under these deals, Nvidia would help AI cloud companies get loans from banks at lower interest rates. In return, these companies would give Nvidia a share of their earnings.

However, Kress wanted to know how Nvidia would decide which companies should get this support, how much money the company could risk and whether these deals would actually make profits. She also tried to control some of the deals being handled by Caprez, who was promoted to vice president in January.

One of the biggest deals involved OpenAI. Nvidia was in talks to provide financial support for a large data centre project in Ohio. OpenAI planned to rent the entire facility and use it to run around $300 billion worth of Nvidia chips.

Nvidia was considering a financial guarantee of $250 billion for the project. The proposal became public on July 26. The next day, Nvidia's shares fell 5%, wiping out $250 billion in market value. Kress later changed the deal and cut Nvidia's planned financial support by half. Nvidia and OpenAI signed the smaller deal on August 17.

Kress's appointment comes after Jensen Huang resigned following revelations about two alleged extramarital affairs, including one involving a suspected Chinese spy and another with an employee. The company is now expected to consider both internal and external candidates for the top position.

Following the reports, Huang admitted to being unfaithful to his wife in an email to Nvidia employees on Sunday.

"I was unfaithful to my wife," Huang wrote. He also apologised to his wife and children, saying, "There is no excuse for what I did." Huang has also been asked to appear before a US Senate committee next month to answer questions about his alleged relationship with Alice Huang, who is suspected of spying for China.

In a message to employees on Thursday, Kress praised Huang and said she would continue "building on the extraordinary foundation Jensen created over the last 33 years."