Nvidia Without Jensen Huang Leaves AI Without Its Banker, and Wall Street May Not Want the Job
Jensen Huang’s exit from Nvidia (NASDAQ: NVDA) hurts the AI industry more than most investors realize, says 24/7 Wall St. co-founder Douglas A. McIntyre. Huang resigned as chief executive this week, and CFO Colette Kress is running the company as interim CEO while the board searches for a permanent replacement.
McIntyre’s worry is about money more than chips. Nvidia will keep making the best AI processors, and customers will keep buying them. What leaves with Huang, he argues, is the industry’s banker. Under Huang, Nvidia loaned or invested tens of billions of dollars in other AI companies, and many of them sent that money right back to Nvidia to buy chips.
Accountants never liked the arrangement, McIntyre says, because it helped Nvidia’s own revenue look strong. Whatever you think of it, the money was necessary. Banks did not want to take that kind of risk, and plenty of tech companies did not have the cash to fund AI on their own.
That leaves a hard question: who becomes the banker to the AI industry now? McIntyre suggests Wall Street could step in, though lenders may not like the risk. He sees no other company willing to take on the role Nvidia played.
His conclusion is blunt. For the time being, he expects the AI industry to be very low on money.
Investors get their first look at Nvidia after Huang when the company reports quarterly results on November 17. The board has said it will consider internal and external candidates for the top job, and it named longtime director Harvey Jones as its first board chair.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
