Nvidia’s handling of Jensen Huang exit follows a familiar playbook, says Mod Op’s Harihar

Chris Harihar, EVP of comms at Mod Op, argues that Nvidia’s response to the departure of Jensen Huang, however unusual the circumstances, is following a predictable pattern.

Harihar, who oversees PR and communications for Mod Op’s clients, including crisis management, says he has handled several difficult CEO and C-suite exits in the past decade and has sympathy for the company.

He describes Huang’s resignation, which came after it emerged that he had been in an affair with a woman who may have been a Chinese spy, as a unique situation that Nvidia will be dealing with well into the new year.

Lawyers in charge

According to Harihar, the most powerful person at Nvidia is now neither Huang nor interim CEO Colette Kress, who is also the company’s CFO, but its general counsel, Tim Teter.

He says Teter and outside counsel are now steering all communications, marketing and public statements, both about the situation and about the company more widely.

Every written document connected to the case will be scrutinised, he argues, with investigations and congressional hearings to come. As a result, he expects caution and conservatism rather than a company ready to speak out loudly in its own defence.

Leaks and power struggles

Harihar says that examining who is leaking stories during a CEO’s departure is one of the most useful ways to make sense of it, and that this is already playing out at Nvidia.

He points to what appeared to be leaks from sources sympathetic to Huang to the WSJ, reporting that Huang had called Kress a “deer in the headlights” and a “reporting CFO”, which he says were intended to undermine her.

At the same time, he says, the board appears to be in self-preservation mode and pushing back against Huang’s supporters, with details seemingly leaked of other affairs Huang is alleged to have had, including with employees.

In his view, power struggles during executive crises are real, and communications become “a knife fight” as people jockey for position, especially with hearings and subpoenas imminent. He advises onlookers to read the coverage with that in mind.

Why the exit came quickly

A week earlier, Harihar notes, Huang was arguably the most successful tech CEO in the world. Once the FT reported that he had a romantic relationship with Alice Huang, he says, two factors sped up his departure.

The first was the midterms. He cites Platformer’s Casey Newton, who posted that “Jensen Huang’s resignation feels like a proper end to the ‘lol nothing matters’ era of American business and politics.”

Harihar agrees, but argues the timing is no coincidence. The midterm elections, he says, have left the incoming Congress feeling it has a mandate to “go after” tech, and had the story broken a year earlier it might not have mattered.

Rather than keep a badly damaged Huang in post, where he risked becoming a symbol of tech misconduct and a target for lawmakers, he says, the board decided to act.

The second factor was earnings. Harihar says companies facing serious problems before reporting tend to take steps to reassure investors first, citing Netflix’s layoffs and executive changes ahead of its latest earnings call.

With Nvidia due to report next week, he argues, Huang himself was the issue. He expects the results to be very strong, and says the board was probably attracted by the idea of a leader on the call who is not personally caught up in the scandal. The company can now direct attention to its performance instead of defending Huang.

Harihar argues that while this case is unusual in many respects, it has much in common with other executive exits, and that “there’s a predictability to the chaos if you know what to look for.”