The risk of the ‘rockstar CEO’

When Jensen Huang quit, it struck me how quickly the conversation shifted from his departure to whether Nvidia could manage without him.

It wasn’t about whether the company had the technology, customers or talent to keep growing, but whether anyone else could do what Huang had been doing for the business. That made me wonder: did investors believe in Nvidia, or just Huang?

The company is hardly short of capable people. Interim CEO and Chief Financial Officer Colette Kress has been with Nvidia since 2013. Nvidia has experienced engineers, established customer relationships and a leading position in the artificial intelligence chip market.

But, listening to guests on CNBC this week, I noticed how much of their concern was about the influence Huang had built outside Nvidia.

On Friday, just a day after Huang quit, Dylan Patel of SemiAnalysis told CNBC’s “Squawk Box Asia” how Huang would persuade executives at smaller companies that make critical components to commit capacity to Nvidia. This helped it secure “the majority of supply chain capacity,” he said.

Without Huang, competitors could try to persuade those suppliers to allocate more capacity to them, Patel argued. And so the big question is, how much of Nvidia’s advantage comes from its technology and how much comes from the relationships Huang built?

A rockstar CEO

There are obvious benefits to elevating CEOs to be rockstars. They can attract investors, open doors and give a company a new identity. A charismatic leader attracts attention, reassures investors and makes a company’s strategy easier to sell.

Huang was particularly good at this. He helped shape the conversation about where AI was heading and made Nvidia central to it. Donning his trademark leather jacket, Huang took to stages around the world, courting world leaders to lay out his vision and explain why Nvidia would be at its center.

Before Huang resigned, Eric Ross told “Squawk Box Asia” that Huang “is the company.”

That may sound like an endorsement, but it also helps explain why his departure has raised so many questions.

Bernstein’s Stacy Rasgon made an interesting distinction on the same program, also before Huang’s departure. Nvidia had capable executives who could keep the business running, he said. What was harder to replace was Huang’s vision.

“They need a visionary like that,” he said.

But for a company whose valuation reflects not just what it sells but expectations of what AI could become, replacing that vision may prove harder than replacing the CEO.

Duncan Clark pointed to another part of Huang’s job. He had become a bridge between Silicon Valley, Asia and Washington, and one of the most prominent voices for the wider AI industry.

“I don’t think you can replace him with one individual,” Clark said on “Access Middle East” on Friday. Replacing him with multiple people is “going to take…