Nvidia CEO Jensen Huang Resigns: So What Happens Now?

Scott Galloway 0:00 This will go down as the greatest leak or breach in espionage history.

Kara Swisher 0:06 [upbeat music] Hi, everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher, and I'm wearing a leather jacket.

Scott Galloway 0:19 Yeah. No, that it, it looks better on you. Um, by the way, I think sales-

Kara Swisher 0:23 It looks better on all lesbians, just so you know

Scott Galloway 0:24 ... I think sales of leather jackets are gonna plummet.

Kara Swisher 0:26 Plummet just for lesbians.

Scott Galloway 0:28 Can you believe this, Kara?

Kara Swisher 0:29 Well, l- let's, let's just get into it. We-

Scott Galloway 0:32 Okay

Kara Swisher 0:32 ... Yes, I can. Yes, I can. Absolutely. We have to get right to breaking news. Nvidia CEO Jensen Huang has resigned following revelations of two extramarital affairs, including one with a woman U.S. intelligence suspects of spying for China. The board has named Nvidia CFO Colette Kress interim CEO and will consider both internal and external candidates for a permanent replacement. Huang's departure comes after reports of a second affair with, uh, another direct report, Kimberly Powell, a senior Nvidia executive who runs its healthcare business. Nvidia's shares are down 7% at the time of the taping as the company faces leadership transition without a clear succession plan. I mean, Scott, like last week when it happened, I-- This was, uh, from the get, I thought he would get g- dumped, but of course, Silicon Valley tried to put up a fight here. But g- gi- give your top line thoughts, and then I shall.

Scott Galloway 1:24 This isn't about infidelity. This is about national security, and that's why this is gonna get so much worse. And I bet that our security apparatus began interviewing the board members, and the questions got so serious so fast that the board members probably lawyered up for their own concerns, and their lawyers probably told them, "You need to fire this guy right away," 'cause any director that is privy to this type of information and what has gone down here, you wanna distance yourself and show that you take this somewhat seriously. And just let me give you just a quick sense of what these chips power and what potentially was compromised here-

Kara Swisher 2:03 Yeah

Scott Galloway 2:03 ... from what seems like-

Kara Swisher 2:04 Go for it

Scott Galloway 2:04 ... other than showing up and saying, "Hello," you know, "I am a spy, and I am here to [chuckles] glean sensitive information," these are some of the things that Nvidia class computing enables: nuclear weapons, simulating nuclear detonations, modeling weapons aging, validating stockpile reliably without physical testing, autonomous weapons, AI-driven drones, target recognition, autonomous navigation-

Kara Swisher 2:32 Yeah

Scott Galloway 2:33 ... simulating aerodynamics, extreme temperatures, flight behavior, and advanced guidance systems, intelligence and surveillance, satellite image analysis, facial recognition, tracking individuals and military movements at enormous scale, cyber warfare, missile defense, biological and chemical threats, military command and control, combining satellite radar intelligence and battlefield data to accelerate military decision-making.

Kara Swisher 3:01 Is that all? Is that all? I mean, come on. I do wanna get into Silicon Valley's reaction 'cause it literally has been soulless and without any interest in this country. It's, it's, it, I think when you use that word traitorous, I'm kinda there with a, a lot of the, these ideas.

Scott Galloway 3:16 Well, okay, but, uh, reckless, but-

Kara Swisher 3:18 Reckless

Scott Galloway 3:19 ... I mean, what it looks like is this guy had the mother of all bad judgment. Is that traitorous?

Kara Swisher 3:24 I don't mean him. I mean the reaction. I'm talking about the reaction.

Scott Galloway 3:26 Oh, I see.

Kara Swisher 3:27 Um, no, I think he didn't know, and that's another issue. Trump knew about it. It, there was a big fight among and between cabinet officials. Rubio and Bessent were on one side saying, "This is fucking serious," and Howard Nutsack, also known as Lutnick, and David Sacks, his, uh, uh, Trump's alleged AI guru, were on the Chinese side o- of this equation and, uh, and were, were pushing Jensen's efforts to get more chips to sell to China. That, that's what he was doing. You know, essentially, uh, that was his push, and a lot of people i- in the national security appa- apparatus were very disturbed by his influence on President Trump, who of course knew about what was going on, and what they didn't do, as Hillary Clinton pointed out on our other podcast, is tell him. Like, they needed to tell him, uh, completely. So first, uh, take on th- this, we t- this, this national security issue is very clear. What-- Let's talk about a couple things, the react... Th- this fight between and among Trump people and what Trump didn't do here, which was to warn Huang what was going on. Him saying he didn't know is a real problem. The government should have told him that this woman was under surveillance. They didn't know about the second woman, um, but they sh- absolutely had a duty to warn this guy of, of what he was in, and who knows how long and how many secrets went through. Who knows? Nobody's gonna ever find out, I, I think.

Scott Galloway 4:49 They sent officials down, and they found unopened boxes of GPUs implying that they were just at a distribution center, weren't even gonna be used there. The question is, where were they gonna go? And you can bet in these hearings that the Democrats are now gonna control, they're gonna bring up the fact that, okay, did the Trump administration know, purposely know they were throttling back defense systems for Ukraine? How early did they know we were, we were potentially losing or, uh, had, uh, information compromised to the CCP? I mean, it, it, this is literally playing out like the president is an asset of the CCP and the GRU.

Kara Swisher 5:29 Yes. Yes, indeed.

Scott Galloway 5:30 And to not, to not stop this, it wasn't telling Jensen. It was intervening and stopping. And for a moment I thought, well, maybe this is so serious, and s- there's so many s- outstanding people in our security apparatus distinct of Trump. I thought for a moment maybe they turned, maybe they sat Jensen down and turned him and started feeding them, you know, false information to take them off one way or another, but it doesn't look like that happened.

Kara Swisher 5:58 No, there was a real fight Last week in the cabinet, there was an enormous fight. They kept trying, Rubio and Besson apparently kept trying to stop this and stop the company

Scott Galloway 6:07 They're all gonna go on background saying, "I was c- freaked out by this."

Kara Swisher 6:11 It seems like they were, 'cause th- 'cause Rubio wrote a memo, like, uh, had a memo distributed, just, I mean, obviously cover your ass, of course. Um, what's, what's also astonishing is, is the kind of influence on Trump. I, you know, as much as you wanna fo- focus on Jensen W- Huang, he didn't know, or he should've known. He should've known. That's a, that's a-

Scott Galloway 6:29 Uh, this is like-

Kara Swisher 6:30 That's another issue

Scott Galloway 6:31 ... okay. I don't know it's daylight, and yet I'm sitting outside getting, getting burnt. I mean-

Kara Swisher 6:36 Yeah. No, I get it

Scott Galloway 6:37 ... this was like, [laughs] "Okay, boss. Really?"

Kara Swisher 6:38 Yeah, I know. He, it's 'cause I'm so attractive in my leather jacket. But, um, y- I know people are making light of it, but it, it, it was, he did it on purpose in that regard. Uh, one of the things that's really... I, I wanna talk about two things. What's gonna happen next with, uh, Nvidia and the AI boom? But first, I will note, uh, Huang does have job security somewhere. Elon Musk, our, says he would hire him, responding to an idea on X with, "That would be an honor." And then our least favorite, uh, minion of, uh, of, uh, Elon's, minion, and I mean that as tiny and tiny and tinier, said, "Release the summary to shareholders." This is Jason Calacanis. "Let them vote their shares. The board is obviously gonna be in CYA mode, not shareholder mode. In a case like this, they will make the wrong decision. I'll bet 90% of shareholders would want Jensen to stay." What an attitude about national security, that money trumps national security. It's really... And they're not in their CYA mode. They're in their this is wrong mode. Uh, just this, this reaction from Silicon Valley, which has been consistent, uh, except for very few people, that who cares, you know, he's making money for everybody, is really a sickness at the heart of why we should not trust these tech people trying to come back, you know, into the fold.

Scott Galloway 7:56 The term we use over and over, and it's in full force here, is idolatry of innovators and idolatry of the dollar. So an unbelievable innovator has created $5 trillion in shareholder value, but that exonerates him from compromising national security? We have, we have millions of active service members. We have millions of people who've died for this country. We have an unbelievable security apparatus. We have IP that is unrivaled such that we can have peace, prosperity, and defense. And this may, this might go down as the greatest compromise or-

Kara Swisher 8:33 One of them, for sure

Scott Galloway 8:34 ... I mean, this is right up there. I forget the guy. The, the US Navy used to be able to literally tell you, "Okay, the Russian sub patrolling here is about to turn left in 17 seconds." And then a spy within one of the agencies revealed that we were doing that to the Russians, and that was a huge blow to our Navy's ability to track Russian submarines. That, this makes that... The, the, the potential damage here is so extraordinary. This will go down as the greatest leak or breach, uh, in espionage history.

Kara Swisher 9:11 The greatest spy caper.

Scott Galloway 9:13 Nothing like this.

Kara Swisher 9:14 Why do you think they have this attitude, like, who cares? Like, oh, my... You know, from f- all of them. Like, it's really disturbing. Sean Maguire, Bill Ackman, they literally have no soul, no American soul. Like, this is, like, so what? It's the so what? And, and just so people know, just this week, Alex Karp, uh, from Palantir suddenly said he was progressive. Do not believe these people. The, they, they do not care about anything but their shareholder value and their own power. I, I, I have said this over and over and over again, and this is a glaring example of it.

Scott Galloway 9:46 It's, again, oh, $5 trillion? You can commit, uh, one of the greatest breaches in history that puts our nation at risk, but oh, baby, you've created $5 trillion in wealth? No problem then. You're exonerated. And on the other side, where we're also seeing the idolatry of innovators, is this notion that we always fall into, and it's a false notion, that one of these figures is a Jesus-like figure, that because they've built an amazing company, 'cause they're smart, it's all about them. Apple was not going to survive without Steve Jobs. Oh my God, what is Microsoft gonna do now that Bill Gates is gone? Oh, Eric, Sergey, and Larry, that is the secret sauce of the company. Oh my gosh, you know, uh, w- what are we gonna do? Uh-

Kara Swisher 10:34 Lee Iacocca. It goes back

Scott Galloway 10:35 ... And h- here's the thing. At Nvidia, there are 50 potential CEOs in that company. You can't build a $5 trillion company without the deep... That's like having the best quarterback in the world, but if you don't have a good line and receivers, you're just gonna have a guy get beat up and sacked all the time. There are... To believe that he somehow is the linchpin to Nvidia and AI in general is again to, to this notion that, one, these figures are Jesus-like-

Kara Swisher 11:05 They behave like that

Scott Galloway 11:06 ... and don't deserve the same scrutiny as normal humans, and also that they have some... You know all these guys.

Kara Swisher 11:13 Uh, they're-

Scott Galloway 11:13 They're impressive people, but they put their pants on [laughs] one leg at a time.

Kara Swisher 11:16 I agree.

Scott Galloway 11:17 And their key skill to, uh, to get to this level, and credit to Jensen, is that they have dozens of extraordinary people around them.

Kara Swisher 11:26 Yeah, that's the one thing. Uh, you know, one, many years ago, before he died, um, Steve Jobs actually addressed this with me, where he said, you know, he, he was talking about, you know, post him Apple and when he was sick, and he said, "What do you think? I'm Willy Wonka, and they're the, the, they're the, uh, they're the, the helpers here, um, the Oompa-Loompas?" He said, "This is a company full of talented people." He himself, the one man that everyone did worry about what would happen, if you recall at the time when he died, people were like, "Now Apple is done," which was very typical of people there, but it wasn't. He knew it himself, that he had this group of executives who has 10X'd that company's value. Whatever you think of Apple, it's, it's bigger and better than ever before.

Scott Galloway 12:09 Look what's happened to Alphabet. Look what's happened to Microsoft.

Kara Swisher 12:11 Alphabet was... Exactly. And one of the things that they love to do is this, like, um- They just think they just, they're, they're gonna die. Like, I don't know what else to say. There's a line in Moonstruck that Olympia Dukakis says to her cheating husband, "No matter what you do, you're gonna die, Cosmo." They think they're irreplaceable, and, and they also take any opportunity, like Elon, of course, is like, "I'll hire him." Let me tell you, Jensen Huang, please do not do this. It would sully an already sullied situation. This is a time to reflect on-

Scott Galloway 12:43 Don't do what?

Kara Swisher 12:44 Oh, work for Elon, work with Elon.

Scott Galloway 12:46 Oh, Kara.

Kara Swisher 12:47 Like, I, I know.

Scott Galloway 12:47 He is gonna be in a bunker with lawyers-

Kara Swisher 12:49 He should be

Scott Galloway 12:50 ... and, and, and in Langley, Virginia, answering very uncomfortable questions for a long time.

Kara Swisher 12:55 Uh, I get that.

Scott Galloway 12:55 Also-

Kara Swisher 12:56 But he also has to be with his family. Like, this is a huge betrayal of his family. If, even if they knew it, like it do- and his, and his employees, it's a huge betrayal that not just that, because his, his employees, he owes a, he owes a debt of gratitude to them. He should be thinking a- about what he's done and spending a lot of time doing it.

Scott Galloway 13:16 I think that's all small ball compared to one thing. If you were to, if you were to have Wonder Woman's golden lasso of truth and wrap it around every Fortune 1000 CEO who is stressed out, is hugely successful, falls into the trap of believing they're more interesting than they are, maybe didn't get a lot of, quote-unquote, "play" when they were younger, and all of a sudden they're the sexiest man in every room they walk into, I bet a lot of them have had indiscretions.

Kara Swisher 13:39 Pretty much all of them, and I know all [laughs] of them.

Scott Galloway 13:41 I would bet, I would argue that out of the 1000, Fortune 1000 CEOs globally, nobody has compromised national security like, like this man right now. This, this, the other stuff makes for good tabloid headlines. It's embarrassing. This is about did, in, in a matter of months, did we w- did he close the delta between our most advanced weapons systems and the CCP's? That, that is what this is about.

Kara Swisher 14:11 Which is what many in the, even in this administration were concerned about. One of the things that Hillary pointed out is that Trump probably didn't tell him because he doesn't believe the national security apparatus, right? He distrusts them if it doesn't go, and everything is hanging on the AI economy booming. So talk about, you know, is Jensen Huang so important to the AI boom that his personal scandal could shake the broader market? It's going to shake it for a moment, but talk a little bit about that. What happens? 'Cause he was at the center, as we've talked about over and over again, the danger of these interlocking deals. Uh, it feels Ponzi-like. It feels some- not Ponzi, it's more of a circle jerk. But talk about that because i- if he's the, if this is the linchpin, then they were fucked in the first place, as, as far as I can tell. It's not a real industry in some fashion.

Scott Galloway 14:57 Well, see, I, I would push back on that. I do think it is a transformative technology. There's gonna be a ton of shareholder value.

Kara Swisher 15:02 I didn't mean that.

Scott Galloway 15:02 A lot of ups and downs. Nvidia's an unbelievable company. It arguably has the biggest moats of all of them, but does it, is this guy the linchpin? He m- not, he's not the linchpin right now. He's, he's, he just took a dump in the punch bowl, the AI punch bowl, you know, the size of the Titanic, and all of a sudden, for example, probably our security apparatus is asking Anthropic what kind, b- you know, who is, and by the way, in the midst of trying to create a book for their IPO, asking them, "All right, we need to know every relationship every senior level person here has had." All of a sudden, I mean, again, we, we made this analogy last week. This is Department of Defense, Department of Energy, nucu- nuclear weapons-like sensitivity, sensitive information with WeWork-like security. When you become a case officer of the CIA, on day one, they say, literally on day one, "If you're on the road, you're stressed out, you go into the bar, and someone attractive expresses interest in you, it's a spy."

Kara Swisher 16:03 Yeah, or you didn't get any more attractive, i- in going to a bar in China.

Scott Galloway 16:05 Uh, you know, that's like the first thing they tell you, and for-

Kara Swisher 16:07 They do. They do. They do.

Scott Galloway 16:09 And for him not to, not to recognize this, but again, it goes back to the idolatry of, uh... I was asked to go on, uh, do a package for Morning Joe this morning, and I couldn't get the timing right 'cause I'm on the, I'm on the West Coast, but the, the two very basic predictions I have are the following, and they all fall under this notion of the idolatry of innovators. We're acting, they're trying to downplay this because everyone's like, "He's above the law or above scrutiny or above norms 'cause he created so much shareholder value," but also, I believe Nvidia stock is probably gonna be higher than it is now. Uh, because this notion that all of AI and Nvidia rests on his expertise is just insane, and, and Ms. Huang, Alice Huang, she, if you l- uh, when the stock, in l- uh, in after-hours trading last night, Nvidia was down 8%. That's approximately $350 billion. You could argue Ms. Huang, her affair cost Nvidia shareholders f- the, the value of Bank of America. That's what it was down in after-hour shares last night, and if you wanna think about potential lawsuits, what if they, what if Binance can connect the hack or the misdirection of Nvidia chips to bad actors connected to North Korea, and North Korea, that North Korean hack of Bina- Binance that cost them $6 billion, what if that was executed using Nvidia chips that potentially were compromised? [laughs]

Kara Swisher 17:38 Yeah. No, this goes lawsuits, congressional scrutiny.

Scott Galloway 17:42 So many people are gonna start connecting really bad things that may have happened, not intentionally, not because of malice because of Jensen, but because of negligence. Every, and I'm convinced the board, p- uh, so a couple days ago, the board announced an independent counsel. I can tell you what an independent counsel's findings are gonna be based on one thing: who's paying for it. Remember the independent counsel for Governor Christie on what happened with that whole traffic scandal? All right, the governor's office paid for it, and what do you know? They came back and said when he found out, he wept a tear, and he didn't do anything wrong. That independent counsel is gonna come back and say, "Mistakes were made, but Jensen can still be the CEO." Lawyers sat down with the board and said, "Oh my gosh, girlfriends You're gonna... If you get infected by this, this is national. People, this is very, very serious shit, and they all freaked out and immediately said, "Uh, you're out." But this notion, again, that, that the world, that the entire sector, the Anthropic IPO coming up is actually more important to the AI sector than one guy's resignation.

Kara Swisher 18:50 There's two things that I think are critical to point out. The first one is w- was something Hillary pointed out, is that Trump is seeing Xi, but one of the things she's predicted is that he will go to this thing, he'll ask Xi what, if this is true. Xi will say, "No, no, no."

Scott Galloway 19:05 Of course not.

Kara Swisher 19:05 And Trump will go, "See? He said-

Scott Galloway 19:06 Liberties denied it

Kara Swisher 19:07 ... he wasn't..." But he, Trump himself, like he did with Putin, "Putin says he didn't do it, so I believe him." That he's gonna believe Xi over our national security apparatus. That's one. The second thing is that he, that everybody in Silicon Valley who has Chinese national ties are g- is gonna be s- and there's a lot, by the way, are gonna be scrutinized very... It may be unfair, but, uh, Chi- not just Chinese, they should be looking at all of them, but the kind of spying going on in Silicon Valley has gotta be vast. Everyone's gonna get scrutinized now, and there are several... I am already hearing chatter about various and sundry tech people who have links with this, with China in ways that are disturbing. They're gonna have to be looked into. W- it's not fair. It's probably not fair in some ways to target, um, certainly to target Chinese Americans, but this is gonna be one of those things where everybody's relationships across the world, and not just China, are gonna be scrutinized with foreign nationals, and that's a, you know... And I, I think it's time for me to admit my wife is a Chinese spy. She told me to tell everybody that. [laughs] I'm just like... Amanda was like, "I'm a Chinese spy, don't you know that? Why would I deceive you?"

Scott Galloway 20:17 But l- let's just go through some of the scenarios here. You just said Jensen was constantly advocating for the sales, uh, the sale of most sensitive chips to China.

Kara Swisher 20:24 As much as possible-

Scott Galloway 20:25 Okay

Kara Swisher 20:25 ... and more and more. Yep.

Scott Galloway 20:26 And we thought at the time, all right, that makes sense. He just wants to sell more and get his stock up. But what if the following happened? And, and we'll never know, but what if... Imagine this phone call to Jensen. "Jensen, oh my love, it's Alice. I'm so upset." "What's wrong, Alice?" "I just got contacted by the CCP, and they have told me they're gonna unmask our affair in the worst possible way unless you continue to sell chips into China. And if they see you advocating for it, maybe this won't come out." How do we know he wasn't unmasked and c- unmasked-

Kara Swisher 20:58 Yeah

Scott Galloway 20:59 ... and compromised six months ago?

Kara Swisher 21:00 Yeah, we don't know. We don't know.

Scott Galloway 21:01 And the thing is, we'll never know.

Kara Swisher 21:03 We'll never... Well-

Scott Galloway 21:03 And that's what happens in honeypots. People think honeypot is, like, in the middle of sex they go, "Give me the design for the latest GPU, Hopper."

Kara Swisher 21:11 Yeah.

Scott Galloway 21:11 No.

Kara Swisher 21:11 Yeah.

Scott Galloway 21:11 The honeypot is meant to gather information and then compromise the person and say, "Wouldn't it be better if this didn't come out? And it won't as long as you do the following simple things for us." How do we know Jensen Huang ha- wasn't compromised a year ago?

Kara Swisher 21:28 We don't. We don't know. That's the whole thing. This is, this thing has got to be undone, and let me say to everyone in Silicon Valley, you've gotta stop. You people have got to stop. If you have-

Scott Galloway 21:38 You've called for that before, and it hasn't had any effect.

Kara Swisher 21:40 I, I know, but this is showing their true colors. All they care about is shareholder value, uh, to, and even to, even to the point of danger across the globe for Americans, Americans in the military, o- our allies, everybody else. It doesn't matter to these people.

Scott Galloway 21:57 We can't trust these guys. What-

Kara Swisher 21:58 We can't trust them. We can't

Scott Galloway 22:00 ... what other intelligence agency... The great thing about the West is the whole is greater than the sum of its parts. When France, who has an excellent intelligence service, the most sob, which has arguably got the best, the best security apparatus in the world, they coordinate with each other, and they share information. They send messages to our security apparatus say, "We see, we're seeing weird activity in this country."

Kara Swisher 22:20 The signal traffic, that's how they figured this one out, was signal traffic.

Scott Galloway 22:24 But they sh- we share information with our allies. What ally wants to share information with this security apparatus right now?

Kara Swisher 22:32 The only good thing is I will say I'm glad, uh, I, um, I hate to pay a compliment to Mark Rubin and Scott Bessen, but they certainly understood the difficulty here.

Scott Galloway 22:40 Oh, they're gonna go on background about how alarmed they were.

Kara Swisher 22:44 Yes, but it's not an intermural, mural fight between David Sacks and this thing. That's how they put it. Th- every single tech person serving, I have to say, not, well, all, most of those tech people serving with Trump are in it for themselves. This is a Silicon Valley beef. They have no interest in national security. They have interest in, in feathering their own nests, and it is so dead clear for this. Uh, I have to say, I do hope that, that, um, one, his wife gets all this money and gets to do what she wants, and she, she has been dragged into this, of course. Um, his family, I ho- I feel terrible for his family. I hope he spends some time repairing those relationships because this is not just a betrayal. It is a betrayal of our country.

Scott Galloway 23:29 His kids work at the company.

Kara Swisher 23:31 His k- I know that. It's just i- i- on every level, but let me tell you, Silicon Valley, he cannot come back with any credibility at this moment.

Scott Galloway 23:38 He's not going to, Kara.

Kara Swisher 23:39 I, I, well-

Scott Galloway 23:39 Why would he? He's worth $180 billion.

Kara Swisher 23:41 'Cause these people are shameless. I don't know.

Scott Galloway 23:43 Yeah, he's not coming back.

Kara Swisher 23:44 I don't... I hope he isn't that shameless.

Scott Galloway 23:45 He might be a VC.

Kara Swisher 23:46 Okay.

Scott Galloway 23:46 He might be a player.

Kara Swisher 23:48 Yeah.

Scott Galloway 23:48 But he's not gonna answer to anybody else or-

Kara Swisher 23:50 It's just, it's grotesque. Um, who, very last thing, who should take over from him? They're gonna have the CFO take over. That makes sense, um, uh, for, for the interim, but, and, you know, probably will not be the, the, the CEO, but obviously is probably very capable, this, uh, this woman, um, uh, is taking over. Um, who do you... Her name's Colette Kress. Um, who do you... They're looking at internal and external candidates. I, I had just jokingly said Tim Cook, um, but ev- you know, I don't know. Who could they bring in for an interim period that will calm, calm this market?

Scott Galloway 24:24 Uh, they could bring in almost anybody because while the stock was down eight, we're, we're recording in the morning, while the stock was down eight percent after hours last night I wouldn't be surprised if it closed higher today

Kara Swisher 24:35 It was d- it was the, the, the P/E ratio was low.

Scott Galloway 24:38 Nvidia right now, the answer is almost anyone they want. So let's go to organizational behavior. Boards have a tendency to, you know, to find strangers more sexy, and that is someone can be perfect in around a series of one-hour interviews, saying like, "Oh my God, the CEO, the number two who didn't get the top job at Apple, wow, is she amazing," and she's pissed off that she didn't get the CEO job, right? Almost anybody would look at this because they can say to this person, "If you slip in and you're the person we want, you're gonna make a billion dollars in the next four years."

Kara Swisher 25:14 All right, give me a name. Give me a name.

Scott Galloway 25:16 Well, who, uh, the name is whoever the, the, literally the best people at all of these companies that aren't currently the CEO. Like, I don't think Satya or Sundar would leave, or the new guy at Apple. Other than that, everyone returns this call. Everyone.

Kara Swisher 25:32 There's a h- head of, I think, software or hardware at Apple they're looking at. There's a couple of people that they're-

Scott Galloway 25:37 There's companies now trading at a P/E that's lower-

Kara Swisher 25:39 Yeah

Scott Galloway 25:39 ... than the S&P.

Kara Swisher 25:40 Yeah.

Scott Galloway 25:40 You don't think Nvidia's growth prospects are greater than Caterpillar or Procter & Gamble?

Kara Swisher 25:45 Yeah, I would agree. Yeah, so.

Scott Galloway 25:46 I mean, no, I don't... Uh, the, the, the bear case is that they're gonna find that 20% of the chip sales were going to bad actors. It's probably not that, and this company has arguably the widest moat of any company in AI. It is, it is the picks and shovels. It's growing like crazy. It's wildly profitable. Who-- The question here isn't who will be CEO, but who won't be? And again, just going back to organizational behavior, if I were on the board, I'd be saying the, probably the best person is, is already in the building.

Kara Swisher 26:23 Yeah, they need a Gwen Shotwell, right? They need someone you don't know as well.

Scott Galloway 26:26 Well, okay, let, let me... He had... Uh, the guy was clearly a bit, quote-unquote, "distracted." There's a bunch of people who've been running this company. The person in charge of design, the CFO, the head of corporate development, the person in part in charge of supply chain.

Kara Swisher 26:39 Yep, so you think an internal person's the best choice here?

Scott Galloway 26:42 Can you imagine how brilliant some of these people are?

Kara Swisher 26:44 Yeah, no, I, agreed. Agreed. Every, a lot of these companies are quite deep. I think when he did-

Scott Galloway 26:49 They know the culture.

Kara Swisher 26:50 Yeah.

Scott Galloway 26:50 They're, all they have to do is move their office.

Kara Swisher 26:53 Yeah. Right. Right.

Scott Galloway 26:53 I mean, what you're gonna find out is any guy who's this distracted right now, there's probably several people who are kind of acting as the CEO right now.

Kara Swisher 27:01 So last question. Trump has based his entire thing on this. Trump looks terrible here, obviously, not that he cares, and of course, he's on his rants against the Democrats because he lost so badly, and they beat him like a drum. But, um, is there, i- i- is, what are the re... is a repercussion here, especially if this sort of has an infective kind of thing on the whole AI sector? Or, or will these CEOs, as you know, as I noted, Alex Karp suddenly is a progressive. I'm so happy to hear that.

Scott Galloway 27:28 Well, Alex, Alex is a, Alex fairly, you could say, has been a moderate through most of his political career, and even a Democrat.

Kara Swisher 27:35 Most until recently. He d- he totally trashed the Democrats over the last year, like badly. Like, I'm sorry. I think they're all opportunistic in some way. Do they back off from Trump going to the White House and letting him m- make, make the decisions around AI? I think they do.

Scott Galloway 27:51 Personally, I'm, I think Rubio's gonna resign.

Kara Swisher 27:53 Maybe.

Scott Galloway 27:54 And I think you're gonna see a lot of-

Kara Swisher 27:55 Wow

Scott Galloway 27:55 ... Republicans and people close to, in Trump's orbit for a lot of reasons all start to distance... I, you know, but, but I've said this before, and I've been wrong, but this is every, every, every layer the onion gets unfurled here is just gonna get uglier and uglier around the implications here.

Kara Swisher 28:15 And the government knew. The government absolutely knew and did nothing.

Scott Galloway 28:19 And I think it's all tied into the same thing, and that is, okay, we have a president, it appears, and people who are compromising our national defense.

Kara Swisher 28:28 Yeah.

Scott Galloway 28:28 Because all they care about is the markets and money, and th- this is put, this is putting Americans at enormous risk.

Kara Swisher 28:38 Mm-hmm. Absolutely.

Scott Galloway 28:39 The, the, the supercomputer at Liv- Lawrence Livermore Labs, it's got a name, I forget what it's called, it's powered by 1,700 GPUs. And by the way, if you have a board meeting at the Department of Energy or Lawrence Livermore Labs or Northrop Grumman, the board members usually go into a SCIF, a secure facility. They can't even take in their phones, and on the way out, an individual asks them, says, "Did you take any notes? Did you scribble anything down?" And if they did, they said, "Please give them to me," and they, they destroy them. And we have the CEO of Nvidia spending the night in Taiwan? [laughs] I mean.

Kara Swisher 29:13 Uh, just so you know, Trump just suggested Tim Cook to replace, uh, Jensen Huang. Uh, I'm not sure. Uh, he said, "Now that Nvidia, Jensen Huang, who has done a fantastic job, has resigned, there is only one man to take his place, Tim Cook of Apple. A legend replaces a legend." Shut up, Trump. Let me just say, you useful idiot of the Russians and Chinese, you need to sit down.

Scott Galloway 29:35 But you know Tim Cook. Do you think he would consider this?

Kara Swisher 29:37 Ugh, I don't know. I doubt it. I don't know. I, I... Why? What a mess. He just left. He might wanna go to some ba- football games. I don't know. I don't know. He's not... I don't think this is... Who... I don't think he knows what's in here, and I don't think he's gonna op- he's gonna take a box when he doesn't know what's in. He's a very controlled person. Y- you don't know what's gonna happen here.

Scott Galloway 29:59 I think it's all downside for Tim Cook.

Kara Swisher 30:01 For Tim Cook. It's gotta... It is.

Scott Galloway 30:02 He's, he's the first ballot Hall of Fame Tom Brady CEO. Why-

Kara Swisher 30:04 He needs to... He already, he already embarrassed himself with the statue.

Scott Galloway 30:07 Do, do you think Bob Iger's glad, do you think Bob Iger's glad he came back?

Kara Swisher 30:10 Yeah. [laughs] No, exactly. I think he shouldn't. I think he's, he already tarnished himself with the statue and the Melania thing. I think he'd done a tremendous job at that company. This would only soil him further.

Scott Galloway 30:21 The, the other thing, just before we go, and I like the boring stuff. The other thing this is gonna create deal, a great deal of sec- of scrutiny around is corporate governance. There's, this is a 10-member board. The average Nvidia board member had been there almost 15 years, nearly twice as long as the av- This was clearly a board bought, bought and sold by the CEO. None of the current board members are current or former S&P 500 CEOs. None have national security experience. The lead director is a 77-year-old former law firm executive, and the board primarily as a, as, as... It was governance by requirement, not actual governance.

Kara Swisher 31:00 And they made a ton of money. Let me end by this. Uh, w- Stephanie Ruhle noted, "When a CEO makes his board unspeakably rich, they provide gratitude, not governance." Let's end on that.

Scott Galloway 31:09 Well, 100%. The, the example I used was Do- the former Don Hudson, probably a nice woman. Her last job, she hasn't worked in eight years. Her last job was the CMO of the NFL. She probably made $600,000 to $800,000. She's made $80 million on this board.

Kara Swisher 31:25 Yeah. There's no way they can... Well, they've done their job today, at least. All right. They had to. They were forced to. All right, Scott, that's it. We wanted to get this out to everyone as soon as possible, so we're gonna post it early. The rest of this episode will be on our YouTube feed later on. [upbeat music]