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Comment by rao-v | Hacker News Reader

It's really interesting to me how unaggressive Jensen has been vs. his peers about tighting up control over his company (even during the recent years when he had huge leverage):

- His board setup is ... odd. He isn't Chairman of the Board (a role over 50% of Fortune 100 CEOs apparently hold). He seems to be responsible for Nvidia having a wierdly more egalitarian structure (all directors including him, are equal, with a designated lead independent director)

- His compensation (~$35M, primarily stock) is ... not up there with other tech CEOs

- He doesn't seem to have ever pushed for super-voting rights (he only has like ~3.5% of the company), but I guess that's hard to change once you IPO

I kinda wonder if this ends with him taking a month off, spending 12-18 months transitioning to a successor and ending as the chairman of the board or some such. He really does seem vital to the company (and thus the stock price).

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Seems like much more sane governance for a publicly-traded company.

Honestly this arrangement (total comp aside) is how it should be for all these companies. When Facebook went public the dual class structure (and Zuck retaining voting control) was a big point of contention.

Agreed. This is almost certainly a key to Nvidia's success. A lot of tech companies end up shooting themselves by putting too much power into the CEO, so that when the MBA takes over it turns into a corporate pillaging operation. Cut back on staff, ramp up on prices, maximize shareholder value at the cost of sane long term business practices.

> A lot of tech companies end up shooting themselves by putting too much power into the CEO, so that when the MBA takes over it turns into a corporate pillaging operation.

You're describing the opposite scenario. Generally it's the founders who get a special class of shares which allows them to retain control over the company even when they own <5% of the stock. Without that the company becomes controlled by Wall St. who appoint the MBA to loot and pillage.

Wall Street rarely appoints CEOs, that's the job of the board. And those members generally get there via investment into the company (usually before it goes public).

The MBAs get there often because it's who the board picks when the founder retires.

The board is chosen by the shareholders in the absence of some arrangement to the contrary (e.g. the special class of shares), and for a large publicly traded company, the major shareholders are generally going to be large investment funds, i.e. Wall St.

The main thing the special class of shares does is make it hard for them to oust the founder when the founder doesn't want to retire. Once they choose to, they either use their special votes to choose a worthy successor, or they stop caring and you get the default MBA you'd have had regardless.

Google did the super control way before Zuck did.

> Honestly this arrangement (total comp aside) is how it should be for all these companies.

It's difficult to say based on the actual data in the past 10 years. The companies with dual shares seem to do well if we look at the companies of the same sizes.

> The companies with dual shares seem to do well

The scenario in which dual-share structures can be a problem is if things don't go well. Specifically they greatly limit the shareholder's ability to protect their investment by removing the CEO. That's why it's considered poor governance.

The counter argument is that active external governance can be bad for the long term prospects of the company. Optimizing for quarterly results, activists investors threatening and getting sweetheart deals that are good for them and bad for the rest of the company.

In the end it comes down to leverage, Zuck famously didn’t sell early so people were pounding down the door to invest when they finally got the opportunity.

I'm imagining a world where you don't get to fuck up as bad as FB did spending multiple years chasing the Metaverse while letting their platform rot, relying purely on plateauing ad revenue.

Looking at their revenue growth, it's one of the best companies for shareholders (ethics aside of course).

I understand Zuck made many failed bets but he had a few big bets paid off. And those big bets paid off so well that FB is a $1.4 trillion company.

It's like people here are still stuck in school where you have to score A+ on every subject.

> Google did the super control way before Zuck did.

Fair, I just remember the backlash to the FB arrangement more I guess. At least in the case of the Google Class B shares control was split between the two, but still, in my opinion, wildly inappropriate for the purpose of public markets.

I may have an antiquated view of how the capital market should work given how long I’ve worked in the space, but I’m strongly of the opinion that going public should be synonymous with surrendering private/individual control of the company. The company is effectively spreading the risk of failure, and I think the average investor doesn’t appreciate or understand the voting vs non-voting differentiation.

Then again there is a monstrous amount retail participants in the market don’t understand and frankly the SEC has done (in permitting these sorts of listings) a poor job of executing on its mandate.

> I’m strongly of the opinion that going public should be synonymous with surrendering private/individual control of the company. The company is effectively spreading the risk of failure

There's certainly a hypothetical principal-agent risk if someone holds voting power / control without holding any financial risk. In practice, holders of preferred voting power shares usually also have financial interests at stake, and thus are aligned with long-term financial interests.

Proposals that forbid holding control shares without parallel financial interests are more compelling than proposals to outlaw multiple share classes in public companies in general, but again, I think you'd be hard-pressed to find cases where having the law would force de-facto changes, and then the question becomes whether the law is worth its compliance costs.

I think there is a fundamental of what do well means in this context.

Well, you probably need to be doing extremely well to get to IPO in a situation where that structure is a possibility.

It's not really surprising that companies that print huge amounts of money with fairly little need for funding do well.

It's the counterfactual that is interesting. How well could this company have done in the other timeline where the founder didn't retain all that control?

Only if you think the definition of doing well is shareholder returns. I think it’s time for a different way of evaluating corporations, like their overall benefit to humanity. In that lens Meta is not doing well.

If you're not a shareholder you don't get to vote. If you are, vote! If you can't, but you chose to be a shareholder, well I'm not sure what the complaint is.

That's the idealized version. In practice, there are millions of people who never "chose" to invest but because of index funds have a significant portion of their retirement savings in companies lacking any real governance or oversight from the board that ostensibly represents their interests.

How do they have index funds?

When you buy a fund, you’re choosing its management strategy (including about votes). If you don’t feel a fund represents your interests well, don’t buy it.

> How do they have index funds?

Sometimes your employer gives you a list of a couple dozen funds run by the same manager, and if you want your employer to contribute to your retirement savings, those are the options.

And if you invested in those index funds in the past 15 years, the return would be superb.

Banning these super-voting companies from 401(k) and index funds would have deprived many low- and middle-income people of those superb returns.

But hey less competition for the houses and stuff, right? We don't want more average people to enter the upper middle class.

The parent comment isn't about dual-class companies, it's about the fact that many shareholders effectively don't get a choice in how the votes for their shares are cost.

Exactly.

I'm not against forbidding index/401K funds from investing in those companies since many people deem those companies as "bad".

Many average people don't actively manage their funds. Based on the past data, they would've missed out on the benefits, but that's okay.

Having shareholder voting power is more important for them, I suppose. While I disagree, I might have voted for the ban. Because this would've translated to less competition for house and stuff.

I wonder how much of this is to do with how recent and explosive (relative to the history of the company) nvidia’s growth was. Like before the back to back booms of cryptocurrency and AI, the company was mainly selling products to gamers (iirc, their datacenter business was like 10% in 2019). It wasn’t that long ago that nvidia’s comparable companies were like… super micro and western digital, rather than Apple and Google.

Also having been more capital intensive and founded further back, Jensen had less sway in the early days of the company and may have put off using the growth to his advantage.

> super micro and western digital, rather than Apple and Google.

Well, bigger than that, but yeah. The early 2020 market cap for NVDA was ~150B, vs. ~1.3T for AAPL. They were the dominant semiconductor design house in an important but still fairly niche area of the PC marketplace.

Jensen cooperated with china well before the affair. I'm pretty sure her being a chinese spy did not change anything in his decisions. His position on China did not change for years. And he is right. As long as we export chips to china it's really hard for them to invest into developing their own chips from scratch. It's just too expensive. If that door closes they will be incentivised to go for it that much harder. As it is right now they are one step behind us but in the future this won't be the case anymore and since we don't have hardware manufactuing experts in US it's just a matter of time we'll get surpassed. Sure we can bet on AI to overcome that but it's way easier for china to get a software stack going then for us to get hardware manufacturing back.

Jensen effectively is Nvidia, and is likely the only person that truly knows the company - this is what ties him to his place and of that doesn't ensure it I don't think anything else would. Almost all significant successes Nvidia had were results from direct action from him, and he truly knows the tech

The fact that him staying is even a considerable possibility, although made much smaller by the second affair if it is true, is a testament to that.

> He isn't Chairman of the Board (a role over 50% of Fortune 100 CEOs apparently hold).

Combining these roles is extremely poor governance, and it shouldn’t be legal but unfortunately it is.

A Taco Bell exec is on the board IIRC. I'm sure she is more than competent and capable. But it's a bit amusing.

I love Taco Bell though, so she is probably doing a good job.

> I love Taco Bell though

I won't trust anything you say. I have seen what I needed to.

Listen to what the other guy says: "Taco Bell is the most delicious, consistent, affordable, healthy, and fun national fast food chain"

But I disagree with "They deserved to win the franchise wars on the strength of the Chalupa alone".

It's the Doritos taco. That taco is so good.

Taco Bell is the most delicious, consistent, affordable, healthy, and fun national fast food chain. They deserved to win the franchise wars on the strength of the Chalupa alone. Baja Blast Mountain Dew is on the Mount Rushmore of soft drinks and Hot sauce packets are a staple in every junk drawer in America. Their discontinuation of Baja sauce and lack of post-1998 commitment to the Enchirito are their only sins (and God has forgiven them because He worked through them to create the Steak Grilled Stuffed Burrito as recompense and was satisfied with such).

There are two actual taquerias less than 100 feet from where I am writing this comment that make food in a completely different league from Taco Bell (which is neither authentically Mexican nor gourmet). It is, however, a shining beacon of multicultural deliciousness and a bona fide American institution. I will not stand for Taco Bell slander and strongly encourage you to reconsider your stance.

Think outside the bun.

He gets other benefits.

He could get 100x of those types of benefits with 1/100 the wealth too

You mean being a centimillionaire is all it takes to bag a 100 chinese spies?

To bag 100s of baddies of equivalent looks.

Doesn't have to be spies (which in this case is just conjecture anyway, and likely just trying to get him for political reasons).

Indeed, that's why they are firing him.

Eh. It's as likely there is some power play going on here and they're using his behavior as leverage.

When big changes happen, it's because multiple vectors have aligned. One isn't enough.

I think you're understating the difference between "an affair by a CEO" and "an affair by the CEO of a company at the center of a technology deemed as critical to national competitiveness and national security, with a spy for your most serious competing foreign nation".

When Congress starts having hearings about your affair, you have fucked up but good, as they say.

Had the frequented epstein island with underage children, nobody would have said anything, and even Congress would fiercely defended Jensen Huang and classify any document that has his name.

That is The American Way.

Is it though? I’m having a hard time believing that American billionaires represent Americans. The anti American sentiment that conflates Americans with Epstein is all too pervasive; it’s the new slur.

Your remark is deeply antisemitic and is quite dangerous to our democracy

I love this comment so much lol.

No, but the American leadership also visited that island, and control the DoJ.

( ͡° ͜ʖ ͡°)

He does not seem vital to the company at all

Can you please elaborate on why? He seemed like a luminary from what little knowledge I have. (Very well spoken, wide domain knowledge, obviously made the right bets, etc.)

Nvidia focused on gaming for 20 years, made a ton of bets that didn't pan out (self-driving cars, set-top boxes, streaming, etc) and made unforced errors (Arm acquisition attempt). Nothing hints at him being a visionary beyond wanting to diversify.

Nvidia benefited from the AI boom by being right place, right time. And just yesterday, Mythos ported itself to AMD cards, showing there's no moat.

That’s an absurd statement considering Nvidia has been pushing CUDA since 2007. I doubt Nvidia was making a “bet” on set-top boxes as the next 100 billion dollar idea. It was simply gaming adjacent which was the main market for GPUs which is their business. Nvidia has maintained their position on GPGPUs potential for 15 years before they paid off. Literally no other company had that vision. If that was an obvious thing, where is Intel, AMD, Samsung, TI, or Qualcomm chips? They only had 15 years. It’s crazy to call it “right place right time” when they have been anticipating it for over 15 years.

Self driving cars are poised to be huge, Nvidia simply didn’t have good execution or plan there because they focused on the hardware rather than data collection. Not sure how the ARM acquisition attempt was an unforced error. Data centers are buying Nvidia GPUs and AMD CPUs. Could have been Nvidia both. It was just in an unfavorable political climate.

CUDA was just not that big of a commitment of resources honestly for a gpu company. It also broke even relatively early in terms of making money because of oil and gas. Jensen personally threatened to axe the entire project multiple times when we nearly failed to meet certain contracts.

I have no insights into internals of Nvidia, but it really doesn’t make sense to me how there is literally no alternatives that are even close to its maturity. I remember in the early days OpenMP and PPL being contenders early on, but I never heard about them after and only CUDA kept going. I was working on a graduate project in 2009 and I remember us looking into OpenMP and CUDA and going with CUDA because we found it easier to use. But also along with CUDA, only Nvidia pushed the whole GPGPU idea and AMD (and Microsoft to some extent) only paid lip service to the concept without any actual commitment like Nvidia did for a long time.

apple has a lot to do with it. Apple drove the early days of opencl, and pulled out some time in ~2012. Ian made a decision to cut opencl support at Nvidia at some point in time after that. Had apple actually made a proper GPU compute language standard after walking from opencl, it might not have been such a empty landscape. But alas, apple wasn't in the HPC business, which was the only place that actually made money from GPGPU.

I can't speak to why AMD is so massively incompetent or why they weren't a factor in driving a competitor.

A factor that might not be obvious is that in 2012 CUDA was mostly a commercial failure. Aside from some penetration into oil and gas HPC and things like physics acceleration in games, there wasn't much traction.

> It also broke even relatively early in terms of making money because of oil and gas.

Beg your pardon? what does this mean?

This is circa 2009 or so

https://developer.nvidia.com/gpugems/gpugems3/part-vi-gpu-co...

It didn't even start with AI, their exorbitant valuations go all the way back to the days of the cryptocurrency mining craze.

But as a counterpoint: AMD is very similar but hasn't benefitted nearly as much. They've been plastering "AI" all over their webpage for years, with little to show for it. So maybe there was something that Nvidia was doing right.

CUDA is what they did right. That and they focused on developers (tooling, support, drivers) outside of gaming long before it was obviously a relevant market. Jensen does deserve a lot of credit.

They didn't just focus on gaming though. They've spent the last two decades making sure they're the obvious choice for scientific and engineering number crunching, by creating and continuing to invest in CUDA. Which is also why they have been an obvious choice for the AI crowd.

They've benefitted from being in the right place, but being there was not (or, not only) luck.

Compare to AMD which did not do that and has not had the same level of benefit from the AI wave despite everyone obviously wanting a competitor to create price pressure.

Is successfully maintaining product leadership in a lucrative consumer category a failure to you?... Their self driving car tech is used in multiple products and clearly represents a future growth area. They've correctly predicted market movements and trends, built or bought up all the pieces needed to offer complete solutions with leading performance.

There would be no AI boom without Nvidia, their cards were instrumental to making it possible, that's why they're so dominant.

The AI winter wouldn't have ended without NVidia cards. NVidia didn't benefit from the AI boom, they made it possible. CUDA is the be all and end all of the AI boom.

Anyone who thinks otherwise is welcome to try and get AMD cards working.

The ARM acquisition attempt looks better each day now that x86 is zooming into irrelevance and Apple Silicon remains exclusive to Apple products.

was arm a bad move in retrospect?

Because that's not how organizations work. Especially not organizations made up of MSc's and PhD's, each with specialized knowledge that the CEO has no clue about. It's a myth that the person with the most power is also the most important.

Instead of asking for elaboration ask yourself why you believe that the success of companies hinges on the qualifications of their CEOs? To the best of my knowledge no one has ever shown any correlation between CEO "quality" and company performance for a publicly traded company.

I suggest reading Tae Kim’s book on the company. Unless Mr. Kim is lying - and he has no incentive to - NVIDIA is very much an extension of Jensen. His management shaped it to the core. It would survive his ousting, but not unscathed. Comparisons to Jobs & Apple are not unwarranted.

Sure, and Jobs learned that he did not have unconditional power.

And when he left, Apple started circling the drain.

Sculley, Spindler, and Amelio were unmitigated disasters.

Amelio managed to make one of the greatest decisions in the history of American business and buy NeXT to get himself replaced by Jobs. How is that an unmitigated disaster? He could have bought BeOS.

Fair point.

Before that, he was known for spending most of his time, polishing his private plane.

I guess we'll find out

it may turn out that his absense might be vital to the companies future.

He's been behaving like a sugar hyped child over the last 15-20 years imho.

The last 15-20 years, so basically when the company was at its most successful?

wait for it... wait for it...

Instead he made his daughter Senior Director of Product Marketing, made his son Director of Robotics Product, and made his son-in-law VP of AI Infrastructure Growth.

Maybe his idea of asserting control is less about voting rights and more about family allegiance.

It is just a small family business setup by a Taiwanese businessman.

That's nepotism and that's a sure sign of despotism.

I think nepotism is toxic behaviour when you are talking about publicly quoted firms and especially one the size of nv.

Fiddling whilst Rome burns is not a good look and should be punished.

Were they qualified? Were better candidates passed over? Your comment lacks substance, although I suspect you may be correct

They are all extremely unqualified, as even a cursory review would tell you

How exactly is Jensen qualified to run a $5Trillion company? He isn’t, yet he built one.

It might be more accurate to say “He wasn’t, until he built one.” That seems like a key difference between him and his kids.

What would be the odds that they are all qualified enough for a company this size? It's wild how much billionaires get away with

How many times would a company scenario need to run a double blind hiring + real time run of the hirees running the company for a period of time to have a statistically significant result to reject the null hypothesis that the people had no affect on the performance of the company compared to a sample of other viable candidates?

family allegiance until it's about his wife

Not cheating is truly that one amazing trick for feeling morally superior they don't want you to know about. Highly recommended.

Has the wife made any statements yet? Intimate relationships have a wide range of definitions of "cheating"

No, but he issued a press release apologizing for hurting her. While it's correct at this point to call his honestly into question, it's a possible clue.

I’m sure they were very qualified. Right?

A flat structure means nobody is a clear competitor with Huang for the top job. If Huang was able to get his way as was, adopting a more traditional structure would have just made somebody else a significantly more powerful #2. A lack of a clear successor might make the transfer of power rougher unfortunately.

Huang's net worth is over $200B, high enough to be in the world top-ten. He has been very well compensated by Nvidia. Either he decided he has enough money at some point or his current compensation numbers are just marketing. The real numbers were clearly much higher in the past, if not presently.

I suspect he's going quietly because the scandals haven't finished emerging yet[1]. At this point, it wouldn't surprise me if somebody has photos of secret Nvidia bunga bunga parties. I do find it interesting that Americans will tolerate lies, murder, and all sorts of other things from their highest elected officials but, if a CEO is revealed to be overly randy, he's got to go.

______________

[1]https://www.businessinsider.com/kimberly-powell-nvidia-exec-...

He's well compensated because he owns a lot of the company, much at much cheaper valuations, right?

For all the complaints about him you can't argue he hasn't delivered a lot of value. Lots of corp CEOs make more with falling company performance and valuation, because they aren't really paid for performance.

>that Americans will tolerate lies, murder, and all sorts of other things from their highest elected officials

Lies are one thing, but murder?

It's not that we don't want to get rid of unethical politicians, we just can't.

Then perhaps we will have a second NeXT and a Jensen Huang who will revolutionize the industry when he comes back.

Yep, he wasn't innovating at all, though:

He could've gave us seamless private cloud GPUs (basically let you run anything on any device, rent out your GPU to earn money, let you play GTA-6 on your phone...)

Could've had the true AI App Store

Could've bought OpenRouter (instead Stripe bought them):

Have not just cloud gaming but the true cloud App Store where Claude and ChatGPT are just apps

This way no terrorist can smuggle Jensen's physical shovels aka GPUs in a potato bag ;-)

There can always be tons of "could have" examples but his decision to push CUDA in my opinion was risk and innovation that paid off

What are you thinking about the AI App store?

How about this all is some sort of theater for him to "peacefully" exit the whole operation and retire, given he not gonna be poor and is very likely to not go in jail given his role in making NVIDIA the company it is.

You think his wife and family are on-board with being publicly humiliated just so he can retire? I can tell you aren't married.

not married, but myself also does not sit on $trillions so I cannot even closely relate to his situation. besides his rock star looks definitely didn't scream family man, and guy seems to have been quite open about it. to further extrapolate my point - Musk, another of them peoples sitting on trillions, did already set some very definite precedents reg marriage and children. pretty bizarre stuff for the normie-looks of the guy, isn't it? now I can only guess what a hot rod such as NVIDIA CEO who's taking calls from POTUS can actually scheme about...

They don't have a prenup. I'm not married, but public humiliation for billion's in nvidia stock seems pretty ok.

As another comment thread brought up, his children are both working pretty nice sinecures, which would have been huge negative press during any kind of corporate governance struggle. I don’t think it was even widely known, I was a Jensen fanboy and I just now learned about it.

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