Michael Burry Predicts CFO Colette Kress' Appointment as Interim CEO Hours Before Nvidia Ousts Jensen Huang

Michael Burry predicted the resignation of CEO Jensen Huang and the appointment of CFO Colette Kress as interim CEO hours before Nvidia board announced the major leadership overhaul.

'CFO Colette Kress may step in as interim CEO, presumably as there is evidently no direct operating report with global knowledge of the company,' Burry wrote in a late Wednesday Substack post.

Before the formal announcement of Huang's resignation by Nvidia board chair Harvey Jones on Thursday, Burry said that Nvidia CEO Jensen Huang has fallen from power as the board moved to oust him following reports of two extramarital affairs, including one involving a businesswoman suspected by US intelligence of working for China.

The Big Short investor believes the scandal could expose far bigger problems at the AI giant, from alleged customer coercion and antitrust violations to a heavily leveraged financing ecosystem that could unravel without Huang at the helm.

'The Don has fallen,' Burry had said in the post. He then compared Nvidia's leadership structure to a protection racket that had lost its enforcer, arguing that Huang's departure could fundamentally change how the company operates and deals with customers.

Why Burry Believes Huang's Fall Could Hurt Nvidia

Burry's concerns extend beyond Huang's personal conduct. He believes the CEO's extraordinary influence over Nvidia's operations could have allowed questionable business practices to flourish.

'The key-man risk at NVIDIA always was a worry,' Burry wrote. According to him, Huang had as many as 60 direct reports and delegated relatively little. He argued that the alleged pressure exerted on customers came from the top, making it difficult for a successor to maintain the same relationships.

He also pointed to an ongoing Justice Department investigation into Nvidia's business practices. Reuters reported in October that federal investigators were examining whether Nvidia had pressured customers, restricted their choices, or used its market dominance to influence purchasing decisions. The DOJ was also examining the competitive implications of Nvidia's proposed acquisition of Hugging Face. No finding of antitrust wrongdoing has been established.

Burry warned that Nvidia's investment in companies purchasing its chips could leave the AI ecosystem vulnerable to a funding slowdown. He previously highlighted Nvidia's $42.4 billion in equity-security purchases over six months and cautioned that extensive borrowing across the sector could amplify a downturn.

Jensen Huang Faces Second Affair Allegation

The first controversy emerged after reports linked Huang to Alice Huang, a Chinese businesswoman and former executive at Singapore-based data centre company Megaspeed International.

The New York Times reported that US intelligence agencies suspected Alice of gathering information for Beijing. Megaspeed, meanwhile, reportedly purchased billions of dollars of Nvidia chips over two years, raising questions about the relationship and potential exposure of sensitive information.

Huang subsequently admitted in a message to employees that he had been unfaithful to his wife, apologising to his family and colleagues. Nvidia launched an independent investigation, although its board said it had no reason to believe national security or company secrets had been compromised. China has rejected the espionage allegations.

The controversy intensified on Wednesday when The New York Times reported a second alleged affair, this time with Kimberly Powell, Nvidia's vice president of healthcare, who reportedly worked under Huang.

Citing five people who worked at the company, the media outlet reported that the pair were allegedly seen behaving affectionately at a hotel during an Nvidia conference in March. The Times said it had not viewed the video reportedly documenting the encounter. Reuters could not independently verify the allegations.