Jensen Huang informed finance executives that large-scale cloud providers were reducing their reliance on Nvidia in favor of alternative chips, while the company faced an “avalanche” of chip wafer and memory shipments it had already committed to buy. The former chief executive sought help to manage these losses and the risks associated with a strategy to provide guarantees to customers unable to afford his hardware, including dealmaking led by his son-in-law, Nico Caprez, that targeted upstart cloud providers.
The internal turmoil preceded the appointment of Colette Kress as CEO, who had previously clashed with Huang over the company’s balance sheet exposure to the AI boom. Kress reportedly resisted the high-risk bets, including a $250 billion credit support plan for OpenAI that was eventually cut to $120 billion. This rift also extended to a planned $500B AI financing vehicle with asset managers that failed to produce any deals because partners found the 25% residual value support backstop provided by Nvidia to be too low.
