'How asleep at the wheel is the board?' INSTANT REACTION to NVIDIA CEO Jensen Huang RESIGNING

help. of our lead off panel, MSNOW Elections and. Analytics. Director Kavir Khanna is here. Peter Baker, Chief White House. Correspondent. for the New York Times, joins us Sam Stein, Managing Editor for The Bulwark. and MSNOW Political Contributor, and Jason Johnson, a Politics and Journalism. Professor. at Morgan State University. He is also an MSNOW Political Contributor. Okay, we're going to get into Scott Colombe, but I have to just start this show. with the breaking news that we are learning.

on Jensen Wong, resigning from NVIDIA. I think David Road, our national security. reporter is going. to join me any second. But Peter Baker, I just want to frame this. for our audience, what a big deal this is, especially for people who. aren't. necessarily deep in the business world. Jensen Wong, founded and has been running NVIDIA. for the last 30 years. In the beginning of this week, we said this man was too big to fire. NVIDIA is at the forefront, the center of the AI. revolution. with this company being the lynchpin. for the THE ENTIRE AI ECOSYSTEM WHEN.

YOU CONSIDER ALL THE COMPANIES. THAT THEY ARE FUNDING. WE LEARNED EARLIER THIS HE SAID HE HAD SOME. SORT OF EXTRA MARITAL AFFAIR WITH A WOMAN. THAT OUR GOVERNMENT BELIEVES TO BE A CHINESE. SPY. SHE RAN A COMPANY OUT OF SINGAPORE THAT APPEARS. INVIDIA WAS SELLING BILLIONS OF DOLLARS WORTH. OF HIGH-TECH EQUIPMENT TO THIS COMPANY. WE NOW LEARNED EARLIER THIS WEEK, THE PRESIDENT, THE COMMERCE SECRETARY WERE MADE. AWARE OF THIS THEY DID NOTHING. THE QUESTION THIS MORNING,

JENSEN WONG IS OFFICIALLY OUT OF THE COMPANY, HE'S RESIGNING BECAUSE WE LEARNED LAST NIGHT. THAT HE HAD A SECOND AFFAIR WITH A. DIRECT REPORT EMPLOYEE JUST MONTHS AGO. AND THE BOARD. I DON'T THINK IT'S GOING TO DO ANYTHING ABOUT IT, PETER. MY BIG QUESTION IS NOT JUST JENSEN WONG IS OUT. WHAT HEADS ARE GOING TO ROLL NEXT? CORPORATE GOVERNANCE IS THAT IS THE POINT OF THE. BOARD. BUT THE THING THAT WE'RE WATCHING OVER AND OVER. AGAIN, WHEN YOU MAKE PEOPLE EXPONENTIALLY WEALTHY, WHICH IS EXACTLY WHAT JENSEN WAND. DID FOR HIS BOARD, WELL THEN. THEY JUST FEEL THEY'RE GOING TO BE SO MANY.

QUESTIONS ASKED OF OUR MEMBERS. OF GOVERNMENT BECAUSE REMEMBER, OUR PRESIDENT SAID TO THE. AMERICAN PEOPLE YOU SHOULD TAKE. AN AI DATA CENTER IN YOUR BACKYARD. WE NEED TO WIN THE A .I. RACE. AND WHILE HE TOLD THE AMERICAN PEOPLE THAT, WE WERE SELLING THESE CHIPS TO CHINA WHICH WAS. ONLY HELPING THEM ADVANCE IN THIS RACE. WHAT DO YOU THINK, PETER? YEAH, NO, I think you summed it up. perfectly there, Steph. It's hard to overstate the importance of Jensen. Tuong in the modern era.

He has had, in some ways, more power, more influence, more impact on our society than a president. or senators or members of Congress. because of the tools at his disposal, what the changes that he and his company. have brought to the fore over. these last 30 years under his leadership. have have been enormous. And it's having already a big effect. on the markets. We've seen NVIDIA stock plunge, lots of money changing hands or being lost. as a result of this scandal.

You have to ask questions about, as you say, corporate governance. What are the board know, and when did it know it? Why did it not do something? Why did the president. evidently shrug off this issue when it was first. raised to him by Marco Rubio? He said, just in the last few days, he vouched for Jensen and Wang's character. And he said, well, you know, he hadn't been told about it, but he had been. And this is, as you said, not just a matter of, you. know, a personal scandal, a foible, a broken marriage, which is bad enough, especially with somebody in the second case who.

reports to you. This is about national security. I think it probably is more central to our national. security. these days and the technology. of artificial intelligence, and for him to be in an intimate relationship, as he. HE'S NOT GOING TO BE THE END OF IT, JUST BECAUSE HE'S NOW STEPPED DOWN. THERE'S NO WAY. AND DAVID, IF YOU THINK ABOUT IT, I DIDN'T EVEN MENTION THE FBI, IF INTELLIGENCE KNEW THIS TO BE TRUE, THERE'S ALMOST NO CIRCUMSTANCE.

WHERE THE FBI WOULDN'T KNOCK ON. Jensen Wong's DOOR AND SAY, HEY, BUDDY, SHE'S NOT JUST HERE FOR THE LEATHER JACKETS AND. ALL YOUR. THE F .B .I. IS THAT IF THEY HAVE EVIDENCE THAT AN. AMERICAN IS ASSOCIATING WITH A FOREIGNER, A CHINESE PERSON POSSIBLY RUSSIAN, WHO COULD BE A SPY. IT'S THE RESPONSIBILITY OF THE. FBI TO GIVE THAT PERSON A DEFENSIVE BRIEFING, IT'S CALLED. I SPOKE WITH THE HEAD OF THE PERSON WHO.

DID THIS BEFORE. HE IS NO LONGER AT THE FBI. HIS NAME IS ALLEN COHLER, HE SPENT 27 YEARS IN THE. FBI, A GREAT PUBLIC SERVANT. HE IS Puzzled that this briefing didn't. take place. They routinely will go to any American. and warn them, this person you're, you know, you're meeting with is, we think is potentially a. THE F .B .I., BUT IN THIS CASE IT GOT INTO THE. WHITE HOUSE AND THIS IS WHY THIS IDEAL, WE. 'LL TALK ABOUT REFORMS LATER, THERE SHOULD BE A.

TEN-YEAR TERM FOR THE FBI DIRECTOR. THAT WAS THE TRADITION SINCE WATERGATE, IT'S NOT A LAW, AN INDEPENDENT NONPARTISAN FBI DIRECTOR. THAT'S ALL CHANGED NOW BUT THAT'S WHY. YOU WANT I WANT POLITICS AND POLITICIANS. NOT CONTROLLING CRIMINAL INVESTIGATION. I WANT TO GO TO THE. COMMERCE DEPARTMENT BECAUSE IT. WAS LAST YEAR WHEN WE DECIDED. THAT NVIDIA WAS GOING TO BE ABLE. TO SELL THESE SUPER CHIPS TO CHINA, THE U .S. GOVERNMENT STARTED TO TAKE A STAKE IN. THOSE PROFITS. THIS WAS ORCHESTRATED FROM OUR. COMMERCE DEPARTMENT.

WARNINGS ABOUT THIS CHINESE SPY. MADE ITS WAY INTO THE COMMERCE DEPARTMENT, THEY DID NOTHING. NVIDIA EMPLOYEES WERE REACHING. OUT TO THE COMMERCE DEPARTMENT, BECAUSE AS THEY WERE INVESTIGATING. MEGA SPEED AND SAYING THERE WAS ISSUES, THERE WAS THINGS. LOOK THE OTHER WAY. HOW PROBLEMATIC COULD THIS BE FOR HOWARD LUTNICK, OUR COMMERCE SECRETARY, WHO'S BEEN THE ONE CHAMPIONING THIS IDEA. THAT OUR GOVERNMENT SHOULD BE INVESTING. IN COMPANIES OR AT LEAST GETTING A CUT. IT COULD BE AN ENORMOUS PROBLEM. FOR HOWARD LETNICK. THIS COULD BE ONE OF THE LARGEST.

SPY SCANDALS IN DECADES. WOULD YOU SAY THIS COULD BE OUR WATER GATE? WELL, I THINK IF YOU LOOK at the scope. of the elections it is a Watergate like. like this is the largest you know defeat. for a president since Watergate I think. it could be but I think it's Watergate was. about sort of just. I THINK IT COULD BE AS LARGE. AS WATERGATE BECAUSE THE ISSUE HERE. ISN'T LIKE Jensen Juan TALKING ABOUT,

LIKE, THE KIND OF CHIPS THEY'RE. GOING TO MAKE ONLY. HE WAS ADVISING AND SPENDING ALL. THIS TIME WITH THE PRESIDENT. OF THE UNITED STATES. THE KNOWLEDGE OF THE PRESIDENT'S. VIEWS OF CHINA DID THE PRESIDENT PLAN TO SORT. I THINK IT'S A LONG-TERM STRATEGY THAT A .I. COMPANIES WERE USING, WHAT WERE THE LONG-TERM. STRATEGIES A .I. COMPANIES WERE USING? THAT'S THE HOLY GRAIL OF INTELLIGENCE FOR CHINA. THE HOLY GRAIL. ABSOLUTELY. IF YOU HAD A BUSINESS EXECUTIVE CLOSE. TO VLADIMIR PUTIN WHO HAS A relationship. with a spy who's helping the United States,

we would love to know what he really plans. to do in Ukraine. How he plans to maybe help Iran? What new weapons system are the Russians. developing possibly against our allies. in Europe. So it's an extraordinary breach that's. occurred here. So it's an extraordinary breach, Stein, let's just talk about the o. politics for a moment. It was this time last THE MARKET. STARTED TO CRATER. OVER THE PANIC THAT YOU'VE GOT A. BUNCH OF DEMOCRATS WHO JUST WON. IN STATES LIKE GEORGIA, TEXAS, OHIO WHERE THERE WAS AN ENORMOUS.

AMOUNT OF BALLOT MEASURES to slow things. down on AI data centers. And there was this idea that, oh my gosh, Democrats are going to come in, they're going to block data centers. The AI bubble is going to burst. Fast forward five days and the thing that could. be not only bursting the AI bubble, fast forward five days and the thing that could. be not only bursting the AI bubble that could be. tearing apart this administration is a scandal. about lack of governance. around these AI companies. I mean, the funniest thing is the person. who was ALERTING THE GOVERNMENT ABOUT. THIS POTENTIAL SPY AND FALLOUT.

POSSIBLE CORRUPTION WAS OUR SECRETARY OF STATE, MARCO RUBIO, WHO COINCIDENTALLY SEEMS TO BE. TRYING TO DISTANCE HIMSELF FROM THE PRESIDENT. Yeah, there's a lot to unpack here. The economic elements, the political intrigue, the spycraft. It also did occur to me that Rubio. conspicuously was warning the White House. about this stuff. And also there's been a few leaks and stories. over the past couple days that Scott. Bessent was trying to put the clams down. on NVIDIA and was being blocked by Lutnick.

It does appear that Lutnick is taking the, you know, majority of the blame here. And maybe rightfully so, right? Commerce Department had regulatory oversight. over this. They did not, according to an AXIS report, did not actually follow. through on the White House policy, which would be an extraordinary breach of. trust. And then on the economic stuff, you're right, the markets have been sort of skittish, I suppose, about a slowdown in AI buildup. That probably would have happened regardless.

of the election results. As you know, towards the end of the. midterms, Republicans too were sounding alarm. about data center construction. And yet that's accelerated now. And now we have this kind of opaque succession plan. that has to happen. at the biggest chip provider company. You rightly know, and you know this way. better than I do, but Jensen Wong was sort of a unique figure. in the amount of control he had over that company. and the acquiescence of the board it wasn't. evidently clear. to anyone what would happen if he stepped. down because no one pondered the possibility.

that he would leave and so when you have. such a key player now in such uncertainty. on top of the political intrigue and then. and the likelihood that this will continue to. have revelations in the political world, it could develop io something pretty bad. politically and economically. How interesting is that key man risk, right? At any company, even in governments, we're constantly talking about, when there is one singular person who's. extraordinarily powerful, there has to be an active succession plan. How asleep at the wheel is the board.

of directors at this company? Jensen Wong, who had not five, not 15, not even 20 direct reports. It is almost unimaginable that the CEO. of the second most valuable company. in the world had 60, 60 direct reports. And there is not one single succession plan, right? On Monday, Andrew Russ Orkin, here we are at CNBC, was on this show saying the market. thinks he's too big to fire. And now here we are. How irresponsible is it for any organization.

of this magnitude to not have a backup plan, especially when there was something going on. for a long period of time? I mean, it was one year ago that Jensen Wong. himself, not the company, hired Risa Heller, who is the most well-known. crisis PR person who specializes. in representing men who are embroiled. in sex scandals. Correct and that he was also simultaneously. having an affair with a subordinate.

at this time which came out yesterday. but this and I'll sound hoagy here again I'm. going to talk a lot about public service. there's reason that rules exist. and best practices and that wasn't followed here. and that's what a board is supposed to do. and just speaking financially they betrayed. shareholders today because of the amount. of money they've lost it's astonishing. the amount of value that all these shareholders.