Before His Ouster, Jensen Huang Belittled the Executive Replacing Him

Jensen Huang summoned his top finance executives to his office this summer. The AI economy, backstopped by Nvidia’s increasingly outrageous bets, was teetering, and Huang wanted to make sure they were getting it right. Jensen Huang and Colette KressOver the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO.

Colette Kress was “a deer in the headlights,” he said, interrupting her presentation, according to a person familiar with the comments. He had summoned Kress and his senior finance team to diagnose 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 Huang’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. Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.

Kress was a “reporting CFO,” not someone who could help him define a strategy or make decisions, Huang said during the August meeting. Then 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 and lessen their reliance on the firm.

Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an “avalanche.” Kress now has to steer Nvidia through that avalanche—and a bigger one. She was named interim chief executive Thursday, taking over for Huang, who resigned after revelations of two extramarital affairs, including one with a suspected Chinese spy and another with an employee.

Kress will need to stabilize a company facing federal and internal investigations. One of the largest companies in the world didn’t have a clear successor lined up. It has said it will look at internal and external CEO candidates.

In a memo to staff Thursday, Kress praised Huang, saying she will continue “building on the extraordinary foundation Jensen created over the last 33 years.” Kress joined Nvidia more than a decade ago as chief financial officer after holding finance roles at Cisco, Microsoft and Texas Instruments.

A graduate of the University of Arizona, she got her M.B.A. from Southern Methodist University in 1996, according to her LinkedIn page. She married David Kress, a former Microsoft executive who got his start in the company’s mailroom.

They have two sons. The finance chief has said she was drawn to Nvidia because of Huang, whom she described as a visionary, and a culture she described in a 2018 awards ceremony interview as “essentially egoless.” Huang ran a relatively flat organization, with about 60 direct reports, including Kress.

Over the last five years the company’s valuation has soared from less than $1 trillion to a high of $5.8 trillion in October. At times, its heft has put Kress in a tough position as CFO. In the spring, Huang’s son-in-law Caprez and another vice president Raj Mirpuri told prospective business partners that Nvidia could arrange credit-support deals within a couple of weeks.

Dozens of companies lined up for this program, hoping Nvidia’s backing would lower their borrowing costs. In exchange for providing credit support, Nvidia proposed that cloud providers share a cut of their revenue. Amid the rollout of the program, Kress raised questions including how to decide which deals to pursue, how to value the guarantees, and how to calculate the return on investment, a person familiar with the matter said.

Behind the scenes, she tried to rein in Huang’s son-in-law, who had been promoted to a vice president in January, people who worked with her said. Nvidia pushed ahead. The company was in talks with OpenAI to provide a financial backstop for the largest data-center deal ever, an Ohio facility that would be the largest in the world.