>I hope people understand that the affairs are not the reason he is being fired - NVIDIA has supposedly been skirting the export ban
If you dissect the timeline of the events and various statements, I think the 2nd affair with a subordinate employee K Powell was the reason to fire Jensen Huang -- more so than the allegations of secretly selling to China.
This is the timeline:
Nov 8 : Jensen issues apology. NVIDIA allows him to use nvidia.com for this
Nov 8 : The Board of Directors publicly backs him up with a "vote of confidence" by stating: *"no reason to believe that either national security or NVIDIA secrets were compromised" and that "The Board has confidence in Jensen and his leadership team."* -- from https://nvidianews.nvidia.com/news/statement-from-nvidia-board-of-directors
Nov 11 : 2nd affair gets exposed in the news
Nov 11 evening : emergency meeting of Board of Directors is called to fire Jensen Huang
Before Nov 11, it looked like NVIDIA might try to ride out the storm and keep Jensen at the helm especially if they saw that the China accusations and evidence wasn't strong enough to be a problem. Again, it was totally unnecessary for the board to publicly back him up if they had plans to get rid of him because of China allegations. However, the Board of Directors emergency Nov 11 meeting is inconsistent with the Nov 8 statement affirming Jensen's leadership.
Nov 8 was coordinated with carefully crafted communications showing that Jensen and BOD were aligned. Contrast with Nov 11 being chaos and an emergency meeting convened.
Reading between the lines, what probably happened is that Jensen didn't come totally clean with the board on Nov 8 and tell them about the 2nd K Powell affair. Instead, the board got totally blindsided and lost trust in him. (Is there another 3rd secret affair he's hiding from us?!?) It was impossible to keep Jensen under those circumstances.
> Reading between the lines, what probably happened is that Jensen didn't come totally clean with the board on Nov 8 and tell them about the 2nd K Powell affair. Instead, the board got totally blindsided and lost trust in him. (Is there another 3rd secret affair he's hiding from us?!?) It was impossible to keep Jensen under those circumstances.
Exactly my read as well. "If you find two ants in your kitchen, the best estimate of the total number of ants in your kitchen is not two."
Lawyer here - I actually would bet this is not the case. Whether he came clean or not, the 2nd affair with a subordinate is basically always a firing offense under the sexual harassment and/or code of conduct policy, whether you are a CEO or not.
The lies may be part of it, but if you didn't fire them for the COC/SH violation, you would be in for near infinite liability because it ends up as evidence that the culture from the top was tolerant of violations, etc. THis is not conjecture, it's what has basically always happened in the legal realm when companies try to work around it.
> the 2nd affair with a subordinate is basically always a firing offense under the sexual harassment and/or code of conduct policy, whether you are a CEO or not.
In my company, it's explicitly not forbidden, but the relationship has to be disclosed to HR early on (source: yearly training). That being said, I'm not sure what HR is going to do with the information.
HR will use the information to ensure the two are not subordinate to one another. Example: A is dating B at the same company. HR will make sure that A is not subordinate to B and vice versa. This will reduce conflict of interest.
You have a high opinion of HR. Often one or both are dumped for violating employment agreements.. making HR and the company's life easier with the least effort.
Not disclosing is generally what violates the employment agreements. Most companies realize that relationships happen at work A LOT. Disclosing allows the companies to make sure they avoid any power dynamic issues. I've known many people across many companies who met their future spouses at work.
It looks like there are no laws that restrict US companies from prohibiting romantic relationships between co-workers. (In reverse: US companies are allowed to prohibit romantic relationships between co-workers.) The practicality: If you did restrict it in employee rules, probably people would do it anyway in secret. It is better for HR to know so they can make sure there isn't a supervisory conflict.
If prohibited and they do it in secret, then you have a free fireable offense in your pocket. Some employers like to have a stick ready to use on a whim.
At all of the companies where I have worked, the rule was only about direct subordinates. That means you can date your boss two levels above! If practice, if you started dating your immediate supervisor, HR would just change your supervisor. Literally, this has been explained to me multiple times during HR onboarding.
That said, Kimberly Powell (former Vice President of Healthcare at Nvidia), reported directly to Jensen Huang. That is a big no-no, probably enough to be demoted and/or fired, especially as CEO.
Disclosing your secret affair to HR would be a hilarious move...
HR of course has no particular duty to out him to Mrs Huang. However, on the other hand, anyone with access to this personnel record, so long as the affair remains undiscovered, has an extremely inappropriate piece of kompromat against the CEO of a trillion dollar company. Maybe that's a small list of people but it seems like a terrible amount of power, to the point I don't think I'd be comfortable with anyone having this piece of information in their heads, let alone on a "consensual relationship disclosure form" Docusign.
Not fire you. It gives them the ability to fire the others who aren’t forthcoming.
I suppose this way they can warn you to date people who are not direct reports… which hopefully you are not doing. Or offer you options (being transferred).
Knowingly allowing ongoing misconduct or consciously ignoring resulting harm is considered bad faith
Protecting the CEO for the directors’ own interest is considered a loyalty problem.
Both of these things would make them personally liable in a shareholder derivative lawsuit.
California permits personal liability for directors perpetrating harassment and prohibits aiding or abetting prohibited conduct.
That's the directors.
Company wise - actions by the CEO are generally imputable directly to the company. This leads to potential hostile-environment claims even by employees who never had a relationship with the CEO, and those claims have been particularly cognizable in California.
Non-termination is also likely to lead to punitive damages, because it will be seen as "malice" or "reckless indifference".
Value wise - sexual harassment verdicts - depends who sued, but probably <150 million to start, long term cost maybe a billion very worst case.
Shareholder derivative lawsuits (where directors are personally liable if they end up with a finding of bad faith) - insanely more - hundreds of millions to billions.
Isn’t musk a clear counterexample here? He has had numerous liaisons with subordinates. Yet I haven’t seen either SpaceX or Tesla (who actually could) move to fire him.
Or is he the exception?
It's entirely up to company policy. Nvidia had no policy barring personal relationships among employees. When it's a direct report it creates some risk that staffers will claim coercion or favoritism. For many companies, that risk is too high to allow, but I've worked for publicly traded companies where that sort of thing happened openly.
I once owned an LP by Dr. John where he sang "Woman is the root of all evil. Money is bad but it's legal" :-)
He of course didn't mean women per se are evil, but that "affairs" with them are. Just his opinion.
Too much money is bad for most people, it corrupts their morality. But money is legal. It doesn't get you fired. You will have many friends because of it. You can get away with a lot of things with high-priced lawyers.
Some people get to have affairs with subordinates, others don't. It's a question of if they have the support of the people pulling the levers or not as to whether it's considered acceptable. Universal rules are for little people, once beyond a certain position they are merely tools for selectively shutting out opposition.
Google was a clusterfuck (literally?) of people boning other people they shouldn't have been.
It's not really a counterexample, though, because most of the people in question are no longer there, and lost their jobs over their affairs. As far as I've heard, Sundar is pretty clean, almost robotic, and has a low-profile personal life. He is the polar opposite in that regard of Sergey (who was a walking HR violation) and Eric (whose NDA-bound mistresses are legendary across Silicon Valley). Much of the reason why they have stepped back from operating roles and fucked off to being class-B shareholders only is because their personal lives are a liability to a major company operating in the environment that Google does today.
DannyBee is undoubtedly well aware of that, having been a lawyer for Google during the time period when this went down.
Yes, I was aware of DannyBee's history, which is why I chose that example.
Sundar always looked to me like he used Andy Rubin's similar habits to finally push him out of the door, and then institutionalized using accusations of this nature as a weapon against everyone below. Obviously Sergey escaped by virtue of ascending to a higher level.
Generally I don't most handbooks have affair with a customer as being an offense. Arguably, that is just good business. On the other hand, having an affair with a vendor would be a problem.
My understanding is that the legal protections for the board of directors can quickly evaporate if they know about such lies and do not take actions. This is a major point of contention in the Oxford LLC bankruptcy proceedings per my understanding after the founder was found to have been persuing several kinds of fraud.
After they caught him in a lie, they may not have been able to not fire him.
They can't legally not fire him. But they can legally re-hire him after firing him. So ironically the ONLY way he can continue at nVidia is by being fired - we just have to wait a few days and there will be an Altman-like resurrection.
I couldn't find any examples of this in a full-text book search, but besides some technical works about insects, and some material about noah's ark, I did find, from 1942:
> In the course of an experimental way, down in the depths of a science building, a beaker full of fermented sugar is left on a shelf. Sometime later one of the experimenters returned to the scene ... to find two cockroaches in the beaker, one of which had a family of about a dozen—the other had drowned itself in rum. AND WHO WOULDN'T IN THE FACE OF SUCH OVERWHELMING RESPONSIBILITIES.
This is a paraphrase of the less technical-sounding: "if you find two ants in the kitchen, you don't have a two-ant problem" which I definitely heard my mom say in the 90s (about actual ants, not metaphorically).
I have a feeling this one falls in the same category as "sweet summer child", which, while technically as old as the hills, only hit critical mass after game of thrones popularised it
I don't think this has anything to do with trust. It's absurd not to trust Huang as the best possible CEO for the company that he brought from zero to 5 trillion dollars in value. It's about being afraid of public opinion, and especially fear of being blamed for not taking the expected decision.
He's clearly not the best CEO for the company if his leadership has opened them up to a tonne of liability. The thing with Powell is problematic enough on its own, and yet it looks like a misdemeanor compared to the fact that he was sleeping with a Chinese spy and potentially knowingly sold chips to China in the face of a US-government-imposed ban. I just don't see why this is so hard. The best guy for the job is the one who doesn't risk the company and investor's money by overstepping into the geopolitical arena because he wants to poke some strange.
Given that a third woman (another coworker) has just been alleged, I'd say that Jensen was the best fit in a few other ways too. I'd be furious if I were an investor.
Furious investor here. Lol. But I'm just as furious with Huang as with the board for firing him.
But it seems especially goofy because it appears it's only about the non-Chinese affairs, since the timeline suggests he was in the clear until the second one came out.
Does anyone here think that sleeping with a billionaire CEO is something that these successful, executive-level women were actually coerced into? That's the fear run-of-the-mill "boss sleeping with subordinates" harassment suits are (usually justifiably) about. That the subordinate was either pressured into the arrangement in the first place, or that she at some point would have wished to stop, but would credibly fear retaliation and thus be coerced to continue.
I'm trying to imagine concretely what that could have possibly been like. Somehow I don't think he could be that desperate to be with a specific woman who didn't want him, that he would threaten an executive to get her into bed, nor to be so obsessed with keeping the affair going that he would even think of threatening revenge against someone who, by definition, obviously had the ability to ruin his life just by opening her mouth. The women held all the power over him, as evidenced by the fact that they just used that power to end his career.
It's not about whether or not they were coerced, it's about the complications that it brings to the table. Has anyone he was sleeping with been promoted? Did the fact that they were sleeping with him compromise the validity of that process? Is he vulnerable to current or previous sexual partners (coercion goes both ways)? Is he vulnerable to people who weren't sleeping with him but knew about his affairs?
Remember, this a guy who shepherds a multitrillion dollar company. He needs to be able to demonstrate good judgement, and that generally means not screwing the crew, or Chinese spies.
Yeah, I'm wondering this too. Jensen's damn good at his job, love him or hate him. I genuinely am struggling to understand why they'd remove him unless there's more they know that we don't.
They know that media and politicians were asking for his head, and that it was riskier for their own asses to resist than to concede. It's that simple.
I don't think there is anything more to it than self preservation. All humans and I'd say living beings are good at it.
This is why martyrs are so praised. You have to overcome this instinct of self preservation to give up your life. I suspect most people can't do it in the heat of the moment.
Basically what others have said, it doesn't matter if Jensen is good at his job or even if nVidia prospers under Jensen. I don't think the board members care one lick about that. What matters to them is their own self interest and it takes a lot of experience to realize that executive leadership and even the board does not instinctively value the goals of the organization above their own self interest. I submit this is true because of the massive amount of bribing err I mean incentive alignment that the organization gives in terms of like stock options or bonuses for meeting certain targets.
I mean that goes without saying given that I was referring to his sexual escapades with coworkers and an alleged spy. Absolutely none of this is good leadership. The guy has to go testify before Congress, and that's probably only the beginning.
He got honeypotted by a rival superpower and appears to have actively helped to circumvent national security concerns and export controls to the tune of tens of billions of dollars.
My god, how much more spectacular could his mistakes be? Does he have to eat a baby live on TikTok while proclaiming "transistors are dead, we're going back to vacuum tubes" or something?
There are very few human beings in history who could have taken nVidia from zero to megatrillions like he did, but the idea of him continuing to run the company after this is absolute absurdity.
if you think getting powned by chinese intelligence is 'stupid mistakes' you are extremely missinformed about the lengths they will go through and the resources they will deploy.
you really dont understand or know how such a placement works. They can very easily do it to you regardless of how paranoid you are.
everyone can be fished.
the simple fact China had to deploy an operative to get yo him means he and Nvidia are well secured. its an expensive and risky option, not the first by far and intelligence agency would take to get to someone.
He produced a one-in-a-zillion success, and he certainly did it the hard way -- he was apparently unusually hands on. The word "genius" gets thrown around a lot, but I think it's apt.
But.
He put together a string of frankly insane mistakes that are now endangering that 5 trillion dollar company from both the inside and outside. There's no chance in hell that they're going to go from $5T back to 0, but you are not understanding the trouble they're in.
Internally, boinking your direct reports (who also happened to have a string of recent promotions) is incredibly ruinous to a company's internal culture, destroying notions of internal meritocracy. How would you feel if all your hard work was apparently not as important as putting out for the CEO? Do you think that would make you eager to do your best work for that CEO? And that's even before thinking about the insane legal liability.
Externally, he got honeypotted by a foreign government and managed to simultaneously mess with national security and, it seems, circumvent export controls to the tune of tens of billions of dollars. nVidia is in some extremely serious shit, and will have the government breathing down their necks between now and the end of time.
How are you puzzled that people point out the radical hypocrisy?
Musk is 'below the bar'.
Jensen is 'just at the bar' for this maybe slightly above.
I'm not condoning, I'm contextualizing.
He didn't do anything wrong or illegal (that we know of), other than breach of trust with his wife.
This media around this is crazy and slanderous.
All of the press is screaming about 'affair with spy and possibly secrets' , which is very unfair.
She's not a 'spy' - she's a hustler looking to make money by reselling GPUs, and she's 'talking to the Chinese government' as literally they are all compelled to do.
Are Jensen and Elon 'spies' because they talk to the State Dept. and US Gov all the time about goings on in China?
In an ideal world - we would have to contend with Jensen's actions, but I'm doubtful he'd be nerfed for personal foibles, which are not material or public concern.
Assuming that he did not hand over key secrets or information, which I highly doubt and which there are no specific allegations, this is a media / meme wave, completely out of context.
The only saving grace in this, is that the Nvidia board may be friendly to him, in which case, maybe they 'know something' that is not public, and this is the 'nice way out' but even then I'm doubtful.
That's true but only slightly true - and the evidence is that rappers can get away with absolutely horrific behaviour that other musicians cannot 'because the culture'. Kaney just set records for his concerts after releasing 'Hail Hitler' album for gosh sakes.
Elon has normalized his bad behaviour and he controls the board - there's no 'smoke that can make a fire' around him as long as the companies are doing ok. He also aggressively threatens people and very few will speak out against him.
There might be a tinge of racism with the 'honey pot' stuff, and 'chinese spy' has hints of orientalism as well. The headlines are really leaning in to the 'Asian Sex Spy' stuff which is terrible. And I've see posts with rich guys and their Asian wives - not nice.
Fair point, but I don't think it's only partially the case.
Next to the Nvidia chief was a woman named Huang Le, or Alice Huang, an executive of a Singapore-based data center company called Megaspeed, which was poised to buy $2 billion of Nvidia A.I. technology over the next year.
Though Ms. Huang and Megaspeed are little-known players in the A.I. industry, their association with Nvidia and its chief executive has recently become a preoccupation in Washington.
Commerce Department officials have been investigating whether Megaspeed, which has close ties to Chinese tech firms, is helping companies in China sidestep American export restrictions, according to more than a half dozen current and former officials and other people familiar with the companies, who spoke on condition of anonymity to discuss an examination that is not public.
The inquiry, which is active, calls into question how closely Nvidia is tracking where its A.I. chips end up and highlights the possibility of American export laws easily being sidestepped. Megaspeed is also facing scrutiny from Singaporean police, who told The New York Times in a statement that they are investigating the company for breaching local laws, without elaborating further.
It's absurd to suggest that Nvidia would need to secretly ship a handful of chips to some sketchy actor when Nvidia chips have a a mile a line long for sales.
Jensen can sell his inventory 10x over. You have to have buying power just to get a hold of them.
Anything is possible but it would be extra stupid for one of the smartest people in the world to risk everything for literally no reason at all.
> It's absurd to suggest that Nvidia would need to secretly ship a handful of chips to some sketchy actor when Nvidia chips have a a mile a line long for sales.
Consider the opposite possibility - that they were doing this and this this might prove that the "mile long line" for sales is in fact not as long as it looks from the outside.
Fair enough - but there are zero specific allegations against him in terms of national security.
His mistress was talking to the Chines government - literally as all people over there are compelled to do - and - was hustling Nvidia chips - as thousands of people are doing.
The idea that Nvidia would knowingly help people do something bad would require some material evidence before it could be a headline.
I think you missed the point. An average person may hold their alcohol and operate, but we don't approve cops being drunk on the job.
Huang betrayed 38 years of trust his wife put into him and recently betrayed the Board by lying to them. That's already admitted, no ifs or buts. He clearly had reasons, as he is a sane person. His reasons were romantic engagement with (alleged) spy. Since he is a sane person, he must have weighed pros and cons and still engage in an affair, even though it jeopardized his marriage and his job. The Board needs to do bunch of "what ifs" in such situation, including paranoid ones, such as "what if this woman had such access to NVIDIA tech stack that each cheap is infused with some form of Chinese virus". We simply don't know how far this goes, but this firing certainly shows much further than just a consequence of a romantic fling.
Also worth noting that in the event his wife doesn't stand by him, this immediately becomes the second largest divorce settlement in history (behind only Bill and Melinda Gates). That's not the kind of headlines the PR department is love with either.
Interesting observation, but leather jackets stopped functioning in that way decades ago. Fonzie made leather jackets safe for normies and totally white bread boring; we're no longer in the "On the Waterfront" or "Blackboard Jungle" era.
But sure, I'm willing to concede that for Huang the leather jacket might have signalled a mid-life crisis of some sort. All the more reason to beware of putting those types of guys in power, because they're always going to be the most susceptible to getting completely fished.
> Instead, the board got totally blindsided and lost trust in him. (Is there another 3rd secret affair he's hiding from us?!?)
That seems to be the most natural guess based on public information, but it's equally plausible that the board knows more than the public already, whether because they drove investigations, received disclosures from Huang, or received insider tips once the heat started rising. Trust aside, they may already might know worse and more materially or legally impactful things.
That's the kind of thing that a healthy class of professional journalists can help uncover and trace in a way that our post-journalism world is losing the opportunity to do. Even still, I wouldn't be surprised if further scandals for Huang or Nvidia started being reported in coming days and weeks. You might be right that it was just too many sex scandals and general loss of trust, but we just can't expect to know yet.
We need to be careful not to equate the two affairs as being countable apples-to-apples. An affair with a customer executive that generates several billions dollars of revenue has a much different risk/reward profile for the board than an affair with a direct report employee within the company. The former also has much lower legal risk: bribery laws aren’t properly calibrated for this circumstance and sexual harassment laws are less applicable. As far as the board is concerned, I imagine they’re fine with him having an affair for every single $5B+ signature as long as he’s delivering the goods and doing so without getting caught so overtly that sales are impacted — thus the vote of confidence! — but that internal affair suggests bad judgment rather than greed-driven judgment, and exposes Nvidia to harassment discovery claims and/or exposes that he lied to the board about not having internal affairs, so he’s out.
Assuming that federal law is enforced neutrally and uniformly, your point is completely correct.
That assumption has not held to date in this presidential cycle, and Jensen Huang has openly had the backing of that president. From a financial perspective, that would considerably lower their financial risk estimate of either having to pay a fine and/or hand over one or two C-level executives for some rich person prison-vacation time. I would assume the board is competent and has verbally, off the record, discussed how many billions of dollars they expect to be fined in the worst case and accepted that as the cost of doing (corrupt) business, but we could get lucky and find they did so with a paper trail that’ll come out in court someday :D
No, I’m assuming it’s not an applicable coincidence here in this specific instance, since the Board wouldn’t have made a statement of faith on November 8th if it was; they are likely an amoral entity but definitely neither an irrational nor oblivious one, and the elections outcomes were well understood by then.
Your two claims are that federal law will dissuade Nvidia’s board and execs from knowingly pursuing and profiting from illegal activity, and that Nvidia is throwing Jensen to the wolves to appease the populace after a failed AI election.
If I’ve misstated either of your claims, that’s unsurprising — given their paucity, no apology is due for that — but I’m still open to being corrected on understanding what you’re claiming. Or: If I’ve restated your two claims accurately, then I both haven’t ignored what you’ve said and I disagree with your claims as presented so far.
> Uh huh.
Note that I’ve disregarded this reply as either a claim or an argument, as I could discern neither when considering it under the ‘best possible interpretation’ site guidance. Perhaps a more plainspoken and less slang(?) reply would be more parseable.
Those were not my claims. merely that they would be likely one element in a calculus, that also includes PR blowback from affairs - and likely change in control of ~ 4% of the companies shares in a divorce.
and that an affair with a customer exec with apparent chinese spying connections, along with billions of dollars of sales to her company in likely violation of export controls isn’t as likely to be let slide with the president being in apparent lame duck mode - since you brought up his apparent friendliness with Trump.
> Jensen Huang had an intimate relationship with a second employee, according to two people familiar with the matter, Reuters has learned... Reuters is not naming the employee.
So to preface, I do not condone adultery / office affairs, etc.
But in the big picture, isn't it crazy that a relationship between two consenting adults is a bigger deal, and of larger impact to the economy, than an action that is supposedly unlawful and threatened national security?
Right, and to make it explicit for some people following along who are wondering why companies have that policy... It's to prevent predatory and abuses of power. There's a power imbalance that can easily lead to exploitation.
Adding on to that clarification: The leverage the boss has over the employee creates a rational pressure for the employee to ignore any boundary they might have otherwise had in order to avoid any chance of the boss using that leverage against them.
The reason companies care about this so much is more practical than moral. Bosses having sexual/romantic relationships with employees leads to irrational decisions that are bad for the business.
Because it's likely sexual harassment. In two ways:
1 - did she feel pressured to have a relationship with him? It's hard to have genuinely free consent when he can make or break her career; and
2 - sexual discrimination towards every other employee. Did she get benefits from the relationship? It's more than fair for the rest of the employees to wonder if they'd also been eg sucking his dick if they would have gotten better raises, faster promotions, etc.
> isn't it crazy that a relationship between two consenting adults is a bigger deal, and of larger impact to the economy, than an action that is supposedly unlawful and threatened national security?
The issue with workplace relationships with subordinates is that the degree of consent is often not clear.
First, his actions were alleged to have impact on national security, but that is not for sure. It is for sure that he was acting inappropriately as a boss, though. Second, I suspect that it is both events which led to his firing. If the affair with the subordinate had come out first, and then the affair with the alleged spy, I suspect he still would've been given grace for the first but not the second event.
Once I worked at a company where the sales VP got caught embezzling by setting up (large amounts of) fake affiliates.
It boosted the overall revenue numbers, and I think they were impressed at how long he had gotten away with it, so they let him be ‘stolen’ by a competitor (who didn’t know the circumstances) while they swept it under the rug.
It's about lying. The proper procedure is to disclose consenting relationships with a subordinate so that HR and the board is aware of conflicts of interest
If an exec is lying about this, what else might they be lying about? Embezzlement? Corruption?
It’s a kind of corruption; specifically that the senior may have coerced the junior. And once it’s done, the junior can blackmail the senior. Since you can’t reliably determine that it was all mutually agreeable, you have to rule it out by policy. Same as emoluments.
you make it sound like hes the only person working at nvidia. he did good things but the company will continue to do good things as countless talented individuals make up the company.
This exposes the true personality and that the person is a liar and betrays those who trust him. Now think, does he betray only women or shareholders as well?
Indeed. The world operates on trust. Once trust breaks down, there's no choice but to deal with it directly if you want to remain effective. Unfortunately for Jensen Huang, that meant NVIDIA choosing to not have a leader they can no longer trust.
I've not fired very many people before, but deception removes any ambiguity as to whether or not someone should be fired.
I’d love if that were true. But actually what the world operates on in selfish money grabbing.
Nobody trusted Trump yet he had the loyalty of all the tech giants because they needed him to make money.
And likewise, AI, and thus the global economy, are dependent on Nvidia. So there was no financial incentive for him to leave if it were just a matter of trust over his inability to keep his penis in his pants.
And let’s remember, this isn’t new news. Nvidia have been aware of this for a year already and it wasn’t a problem until recently.
So what’s changed? The obvious big thing is American government. The Democrats have made it very clear that they’re not going to tolerate any more shenanigans. So removing Haung is a great way to reduce the risk of any financial penalties for Nvidia’s deals with China et al.
> what probably happened is that Jensen didn't come totally clean with the board on Nov 8 and tell them about the 2nd K Powell affair
This is the right line of thinking, but I don't think a second affair is enough. To me, it says there is more we don't know. Possibly a lot more, and a lot worse than a second affair. Apart from anything else, that is the only reason to act this fast. You don't fire a CEO like Jensen in 24 hours over an HR indiscretion.
So I think both you and the parent are correct, but its a combo: he didn't come fully clean, but there is a non-public part that probably looks a lot more like treason that the board knows and we don't.
It may be that, but I feel it's more about managing public perception. Potentially leaking secrets to a literal (stated) enemy of state feels much more catastrophic than infidelity (obviously his wife may not feel that way).
If someone has been:
1. Managing the company well
2. Attracting and retaining good talent
3. Making money for shareholders
4. Building strong company fundamentals
Then forcing a resignation over this seems... odd. I was under the impression that barring this infidelity, Huang was one of the more sane tech CEOs. I feel like I could to literally any other CEO (Zuckerburg, Bezos, Musk, Ellison, Gates, Jobs) that have done something equally bad or worse, and haven't had to resign.
> Reading between the lines, what probably happened is that Jensen didn't come totally clean with the board on Nov 8 and tell them about the 2nd K Powell affair. Instead, the board got totally blindsided and lost trust in him. (Is there another 3rd secret affair he's hiding from us?!?) It was impossible to keep Jensen under those circumstances.
Yeah, this seems likely. It's also quite possible that he not only "didn't come totally clean" but outright lied to the board i.e. "this was a one-time thing"
> I think the 2nd affair with a subordinate employee K Powell was the reason to fire Jensen Huang
Hasn't Musk done this multiple times (including having children with subordinates)? He's still the CEO of a few companies. Bill Gates married one!
Boards don't care about this kind of thing unless they are already looking to get rid of someone. Worst case they pay the person off, and the cost will probably be less than a principal engineer earns in a year.
This doesn't pass the smell test. My guess is damning evidence was discovered which incriminates several high-level individuals at Nvidia with willfully bypassing the export ban. The second affair was leaked as a cover for why they were letting him go.
Musk has controlling shares of his companies. Of course he's not going to be fired if he answers to himself. And Bill did all that ~40 years ago, not today.
I don't know why people find this so hard to believe. CEOs of Nestle, Intel, McDonalds, Best Buy, Boeing have been booted once similar affairs came to light. Like this is an express ticket to getting fired no matter who you are.
Many times, a board will maintain that they have full confidence in a CEO right up until they actually fire him. Their non-binding vote of confidence means nothing. Just as one example:
- July 25: Amid the Deepwater Horizon disaster, BP publicly stated that Hayward had the board's full support.
- July 27: BP formally announced that Hayward would step down as CEO, with Robert Dudley replacing him.
Similar situations with Bob Chapek, Travis Kalanick, the Boeing CEO in 2019 when all those crashes were happening, Carol Bartz, Bob Diamond...
I'm curious about what the reasoning is behind this practice. If a company's board puts out a statement of full confidence and rapidly changes their stance (in this case 3-4 days later) then doesn't that give the appearance that either the situation is drastically worse and they were inadequately informed at the time of stating confidence? I wouldn't feel very confident about the counsel of the board of directors that changed their stance that drastically in less than a week.
Just trying to understand what the benefit is to the approach from the perspective of the board.
The original post was about it being difficult to say they don't mind the ethical problems because the executive is important to the company. I was suggesting example phrasing. This has nothing to do with politics - it has always been the case, and always will be.
That's not what i referred to, it's the fact that society thinks it's ok: “His moral failings are secondary to their commercial successes and clear delivery of shareholder value”. It's a society where christians think Trump is a morally acceptable choice.
What about a board that says: "We think the CEO is a bit crap, but due to how the business is structured we have no actual power over him"? cough meta.
Jensen's PR strategy with his open letter was to draw attention TO his affairs. It's a "limited hangout" strategy.
If we're just going to be purely speculative anyway, it could be the case Jensen is the one who himself leaked the 2nd affair, in order to continue this distraction strategy.
I wouldn't be surprised if 100% of the info we have on this is Jensen's PR. 1) Anonymous "leak" tweets are all PR agency slop -- real jouranalist scoopers would take credit to draw attention to themselves. 2) Any Federal investigators aren't going to say 1 word to the public. Ergo, it was always Jensen trying to keep the narrative on his affairs.
And if you want to be TRULY conspiratorial about it, perhaps one or both of the affairs never existed, only the smuggling.
I have seen a weird number of posts/responses trying to say "this isn't because he had an affair" and like, I guess it's not, it's that he had multiple affairs that have confounding effects on the business (with subordinates, with people who got chips to China).
So no, it's not literally about his sex life, but pretending like that doesn't factor into the whole things seems like a very strange point for people to keep making. It may not be that 90% of the cause is "he had sex out of his marriage" but it's also not 0% (it surely doesn't make him a "good leader(tm)" if he's having sex with subordinates)
Sex with spy of country actively tariffed and greatest active threat to US. Billions in tariff bypass. That puts you in jail for decades territory. People magazine cares about who he is banging. Legal and possible company nationalization care about bypassing tariffs.
Tariffs are for imported goods, and export tariffs are unconstitutional in the United States. The monetary value of whatever transaction in question here is completely irrelevant.
This is an export security violation. Still criminal, but not tax evasion or anything like it, and the monetary value holds no legal relevance - the number of articles themselves does.
Selling chips to China is pretty easily provable. Who cares what pussy he is diddling, it matters that such a large company might have their assets seized due to such blatant shenanigans.
All of this is based on leaks, mainly from the US government. So the November 8 board decision might've been the cause for the November 11 leak, because the original leak failed to achieve the goal of removing Huang. Remember we're talking about stuff that's over a year old. None of this is an evolving situation.
This was my original read of the whole thing. The timing on this, happening immediately after the Republicans lose big-time? This all seems so incredibly convenient and weird.
I sincerely believe this is retaliation for something that he did or didn’t do.
The Dem plan for AI was to work with Anthropic and lock down GPUs to prevent running open / unapproved models. Basically limit AI development and inference to a handful of regulated companies.
Jensen Huang wasn't on board with that so now he's gone.
Getting downvoted, but if it's not a deliberate outcome it's certain an interesting and relevant one.
Huang was famously loyal to the gaming GPU markets, and there's been a subindustry of people running open inference on high-end consumer GPUs.
If NVIDIA kills those product ranges that subindustry will die, AI hardware will be limited to corporates and the small number of individuals who can drop five figures on an AI rig, and open models will become less valuable/dangerous.
Meanwhile I find it hard to believe the board had no idea what was happening and they're suddenly shocked - shocked! - to discover that Huang was plugging his CPU into the corporate motherboard.
What could he have done to swing the election in their favor? I think it’s more likely that with Democrats in power, NVIDIA can no longer count on the Trump administration’s corruption to prevent investigations. There may be a lot more left to uncover, and they now have a convenient fall-guy to pin everything on.
Nvidia’s Board is not a list of power players. They were, until now, largely pliant to Jensen. They flipped because they saw what everyone outside Silicon Valley did—that they personally, and Nvidia broadly, would pay the price for Jensen’s failures and potential crimes if his brand wasn’t severed from Nvidia’s.
This is the same sort of timeline argument Noam Chomsky gave me regarding why he thinks that Zelensky stopped negotiating with Russia after Boris Johnson’s visit. After the firefights in Bucha he was still saying they’ll have to make a deal, then Johnson arrived and said Putin is not a man to make deals with. And then Zelensky stopped saying it. I asked Chomsky about this explicitly (whether the discovery of bodies shot point blank in the aftermath of the Russian withdrawal from Bucha was the decisive factor) and he pointed to the timeline. I don’t know if I fully buy that argument:
Would love to hear more about this - is there a timestamp within the video where the relevant discussion is? Other sources? Ukraine shifted pretty dramatically to offensive operations within Russia in late-2025/early-2026 and I'm curious why.
Chomsky has pretty terrible track record on ascribing motivations in the conflict, going back to Khmer Rouge. Should have really stuck to formal languages.
It's absurd that they're going to drop a guy that build the most profitable company in the world over 35 years of working every day, and is basically beloved by his own staff and the industry.
Something stinks to high heaven here.
Elon Musk has multiple allegations of sexual assault against him - he's had sexual relations with at least 4 of his staff including children with one of them while he had children with another women.
Elon solicits young women over social media to have children with (which is also soliciting sex).
He attacked his own regulators during DOGE, has direct meetings with Putin several times since 2022 (still ongoing), he's taken $100's of Millions in investment from Chinese state banks, special deals re: factories and data capture and sharing rights.
And more.
The difference is that Elon has 1) and iron grip over the board and 2) is an aggressive, spiteful person who will attack anyone and everyone - and everyone lives in fear about saying anything negative about Elon.
Jensen is paying the price for being a nice guy.
Apparently he should have been dragging the board over the coals, and threatening the press and industry to keep quiet, to quash the stories, to kiss up to Trump and make sure there's nothing but love from the government etc. etc..
" It was impossible to keep Jensen under those circumstances"
I'm sorry but this is very not true and ... I don't want to be mean but it's effectively naive.
Elon tells his board whatever he wants to tell them including ridiculous fabrications about products, roadmaps, and handles them with total contempt.
The fact that someone's sex life would factor into the decision at all is so backwards.
First, polyamory has been gaining popularity. But a lot of poly people I've met keep that strictly secret, because their friends and family wouldn't understand and would judge them harshly.
Second, the problem isn't that he slept with someone other than his wife (we don't know what kind of agreements they have in place, and ENM is a thing in 2026). It's that he slept with a subordinate. And that's a real problem due to the power differential that exists between him and his employees.
So it's not the second affair per se, but bad judgement. Dating at companies should only happen parallel in the hierarchy, not up or down.
What I'm pushing back on is the notion that someone should be judged simply for fucking someone who isn't his wife. There's a reason people keep ENM agreements a secret, due to the judgmental attitude from the public at large.
Hopefully alternative lifestyles will become normalized to the point where our descendants in 30 years will look back on us with the same disappointment that we look back in 1996 gay marriage laws.
ENM among older couples is particularly common. But sure, it's always possible that Jensen was just cheating on his wife without consent. The thing to watch for is whether his wife has expressed unhappiness publicly about the situation. Notice that in articles like https://archive.is/Ubg4k they'll do everything but ask her how she feels. Or if they have, it's possible she's refused to say anything on the topic. That silence means something, and we don't know what. So hold off on the judgments until we have confirmation that she's actually unhappy with it.
The spy was also a customer. This is two pretty broad violations of your usual HR policies at minimum even if you remove “spy” from the equation and ignore all the sales to sketchy parties.
From the article's first paragraph: "Nvidia CEO Jensen Huang resigned Thursday, capping a spectacular downfall for a poster boy of the artificial intelligence boom whose exit following reports of extramarital affairs now thrusts the chipmaker into an uncertain future."
For a lot of people, it's about the sex. In fact if you only read the first paragraph, you'd come away thinking it was solely about the sex.
At least on HN the sentiment is more nuanced though, which is good.
There was a comment yesterday that suggested this was either a Chinese intelligence to destroy NVidia, or CIA operation to get Nvidia under control of a friendly puppet. [1]
My money is on the CCP, simply because they have more of a motive for it. From all appearances, NVidia was playing ball with the Trump administration. He was a frequent ally of President Trump, Trump supposedly knew about this information for the last year and sat on it, and even the CIA leaks that started it stressed how much Huang had praised the Trump administration. Reportedly they had already voluntarily stopped exports to MegaSpeed [2] as of June 2025. China, however, has a lot more to gain from his departure. It's going to harm NVidia very severely: reportedly he's very hands-on, "the conductor that makes a very complex operation work", and as a founder the whole knowledge pyramid that the company is based upon rests with him. If they want their domestic hardware industry to surpass NVidia, the easiest way to do that is to take out NVidia leadership.
I suspect that he was compromised by both the CIA and CCP, and with tensions rising between them, eventually found a situation where they each wanted him to do different things, and he couldn't satisfy both. Likely the CIA got wind that the CCP was going to move with their leverage, and published to stave that off. This also has the nice side benefit for U.S. power of letting the other side know the extent to which the CIA knows what you're doing, and showing that even the CEO of the richest company on earth is not immune to U.S laws. But it's still a net negative to U.S. power to have Huang out as CEO of NVidia, simply because it's such a net negative to NVidia. This is only a desirable outcome if he's going to be ousted anyway, or if he is otherwise compromised to become a Chinese puppet.
I suspect the role of the second affair was to show the board just how deep the kompromat goes. First affair, okay, it could be an indiscretion that happened in the past, cut ties and do damage control. But if there's a second (and third and fourth and many others?) affair and everybody knows about it, it becomes impossible for Huang to lead the company because everybody has so much leverage on him.
> My money is on the CCP, simply because they have more of a motive for it.
No they don't. They just lost access to Nvidia chips that they still rely on (even if not said out in the open). Alibaba's stock tanked on the news for example.
> I suspect the role of the second affair was to show the board just how deep the kompromat goes.
The role was to get the agenda off spying and export (the things you'd go to jail for)
They would prefer their companies buy local, as it will advance their local semiconductor infrastructure.
However, these companies would prefer Nvidia if they are allowed. All the advances in the past few years are due to advanced chips being restricted, so they had to step up.
It's interesting, the second comment I linked to was about the divide between Model Hawks vs. Hardware Hawks within the state department, and this comment thread is a great example of that.
Some people believe that the key moat for AI is the model, and under this model (hah) torpedoing NVidia would be bad for China and good for the U.S. because they won't have access to cutting-edge NVidia hardware for model-training. Other people believe the key moat for AI is the hardware, and under this model torpedoing NVidia would be good for China because it'd allow Chinese hardware makers to catch up and bad for the U.S. because it destroys our key competitive advantage.
Interesting that a policy decision depends so heavily on a question of fact, but that isn't unique to this issue. (I suspect that left and right would agree on abortion if they could agree on whether personhood begins at conception or birth, but they don't, so). There's also an element of time preferences here too: it's likely that model training is dominant now, but hardware will be dominant when you project out a few years, and so both factions could be right but on different timescales.
There are certain lines CEOs of this level absolutely cannot cross, and a relationship with a subordinate is one of them. Hiding it, putting the entire company at risk for it, a board can’t trust a ceo that puts their extramarital dalliances ahead of the company’s interest.
Chips to China, on the other hand, is in the company’s interest. That’s what lawyers and lobbyists are for, and when they behave enough, that’s also what “rockstar” CEOs are for.
Jensen got too big for his leather jacket. Simple as.
>, but I just don't see how any of this will change the fundamental core business value of NVIDIA. [...] Its going to keep printing money with its chips.
The key is that NVIDIA is in a fast-changing technology sector and that means the core business requires NVIDIA to keep innovating new and better products that beat the competition. Having a company continuously adapt and iterate future products requires a visionary leader that pushes the company to stay on the cutting edge. Competitors and alternative products like Google TPU, Amazon Trainium, AMD, Cerebrus, etc are not standing still; they're innovating too.
Many shareholders (including employees with RSU stock) are worried that NVIDIA without Jensen puts them in a weaker position for the future unless they can find someone with equivalent influence and vision.
Intel was once on top of the world with CEO Andy Grove running things. But then the followup CEOs didn't keep Intel at the cutting edge and they lost market leadership to TSMC, AMD, and Apple Silicon in various areas. The world kept changing and Intel didn't adapt fast enough.
It very much clashes with the idea held by some that CEOs are fungible and that the value is all created by ICs. But yes, semiconductors are at the forefront of human technology and you need the whole company (including c suite) firing on all cylinders.
A variant of that idea is the push Jensen could have he's already done by now. The company is basically set and it will continue to do it's thing into the future. Apple as corollary example. He just can't as one person have been in day to day of everything that made Nvidia tick.
Everyone is somewhat replaceable but the work they historically have done might have been critical to reach current stage. And Nvidia may miss on what he could have done but it will take a while for the downturn to happen and others are just as capable. They may find another internal or external candidate that may be able to push further. Market will price the uncertainty until then.
So IMO, it really doesn't seem to be that much of a fast changing sector. Moores law is long dead, my 6 year old 3080 laptop gpu is still damn powerful, rather we are seeing power efficiency/optimization now between GPU generations.
Its more of a 'race to the bottom' for price efficiency/hardware deg efficiency against price of electricity and price of the chips over lifetime, than it is a fast changing tech sector where breakthroughs are being made everyday that change the entire game like say with OpenAI and Anthropic.
Every big company codebase with millions of lines devolves into a similar state. The small codebase starts with clean conceptual integrity. It then inevitably decays into incomprehensible spaghetti code as more people are added to it. Various reasons for it including the later devs caring less about the code than the initial team of devs, deadlines, avoiding refactoring because of fear about breaking things, etc.
If you don't want AI to create fragile code, you have to apply the same quality gates that would have been applied to pre-AI hand-written code to keep everything clean. Most companies don't do that.
This is actually a perfect depiction of what "bug-driven development" looks like, which is basically where the current generation of AI-only codebases are headed.
No I think the argument is more like… on average the code AI produces is better than what the majority of developers were producing before AI. Don’t forget HN crowd is the exception. The people that post here are like 1% of total programmers that like this as more than just a job. The industry at large, 99%, is just people doing their job writing average to poor code and going home. AI does that better now.
I doubt we're really the exception, and I think a good developer from the before times can still guide AI to produce a reasonably maintainable codebase over time. Most likely, a bad developer from the before times will still be able to guide AI to produce a mess. But yeah. It seems to me that the latest models produce above average code, based on the messes I've seen (and helped produce) over the last 25 years or so. It's not as good as what I'd build by hand these days, but it's good enough, when in the right hands.
There was a time we all on HN agreed that contracting out the code was a bad idea. That ownership of the code was important, and if you sent your code out to a one off contractor it would come back as unmaintainable liability.
The shift in thinking leads me to believe that the real reason HN hated contracting out the code was the fact that you had to pay the contractors for their work.
There is also the possibility that a lot of HN hated outsourcing to contractors for the same reason a lot of HN hates AI: they were taking our jobs ;-)
And I think the outcome will be the same in both cases: we figure out how to outsource effectively. In fact, many of the same strategies we developed then are applicable now.
Not uniformly of course, no large community is that homogeneous in their opinions, but if you look at the stories and comments that get upvoted more than others, they tend to be heavily on the negative side. Heck TFA is a prime example.
As a more general example, most commenters here still believe that most of the revenues flowing around is circular investments even if there are multiple sources showing e.g. enormous growth in broad enterprise AI spend. I’ve linked many such sources in the past, but somehow they never get much traction around here. Wonder why that is ;-)
>Except you can write off those $1400 units as $2400 of losses that will offset profits
No, the IRS doesn't allow tax deductions for the "missing $2400 rents" of unrented units. IRS only allows deducting ongoing expenses such as "maintenance, insurance, taxes, and interest," :
Instead of writing off "unearned revenue," structuring arranges the transaction so that the cost of unoccupied units is treated as a fully deductible operational business expense.
The most common legal vehicle is a Master Lease Agreement, where a single corporate tenant (the Master Tenant) leases an entire block of units or a whole building from the landlord for a fixed monthly sum, taking on the responsibility to sublease individual units.
Splitting your operations into operating companies and property-holding companies furthers this.
It's rate-limited but other hacks to scrape Youtube without the API will also be rate-limited as well unless you try to trick Google via unapproved hostile methods such as commanding an army of residential ip zombies and aggregate it.
Fundamentally, the index of Youtube videos lives in Google's servers so you're beholden to Google to get results from it. If the issue is that the Google's official results from search queries are not surfacing the videos you think are actually there, it means you'd have to build a duplicate (massive) "shadow" index to return those missing videos. To build such a beast, you're back to hitting the brick wall of rate-limits again.
>"physical media & a Jellyfin install" is going to be more sensible.
Physical media is only cheaper if the user is ok with re-watching the same videos repeatedly. The higher cost of the DVD/Blu-ray discs can be amortized over multiple repeat viewings. (Good example is a 5-year old kid wanting to re-watch Frozen or Shrek cartoons again for the 100th time. A DVD player is cheaper than a Disney+ subscription in that scenario.)
Digital streaming subscriptions are cheaper if the user almost always prefers watching new shows instead of re-runs. That's the viewing habit of the vast majority of subscribers. Trying to only buy physical media to get a constant diet of new shows -- even buying the cheaper used discs from thrift stores -- will cost more than a subscription. Also, the physical discs are not immediately playable on an iPad/smartphone so requires extra hassle of ripping/transcoding that most normies don't want to do. Also, buying harddrives for the NAS server to store the rips isn't cheap either.
I'm all too aware of people preferring brand new shows because I've ripped several hundred DVDs to a stack of terabyte harddrives that nobody ever watches. Instead, they'd rather see what's new on Netflix, HBO Max, Amazon Prime Video, Apple TV+ ...
EDIT to add an update of a previous comment about my friend's defiance against ads added to Amazon Prime Videos by borrowing DVDs from the public library. She lost that battle because she finished all the DVDs she wanted to watch so had to go back to Amazon Videos for new content. She now endures the Amazon's ads. https://news.ycombinator.com/item?id=42388626
She really tried to fight ads by avoiding the platform but couldn't sustain it because she ran out of free DVDs to checkout from the library. This means buying DVDs to get something new to watch if trying to stick with physical media and unfortunately, that costs more than streaming platforms. She deals with the ad interruptions by multitasking on an iPad when they come on.
>We still have public libraries. They usually have a pretty sizable collection
The public libraries in major cities like the New York Public Library have sizable collections. The smaller libraries in the outer suburbs have a much smaller selection. Yes, there's also inter-library loan system for the suburbs to pull from the big city library but there are restrictions such as only having 3 items at a time.
The neighborhood public libraries are wonderful resources but there can be limitations (quantity of titles) that prevent it from being a sustainable substitute for streaming for someone that wants to watch ~2 hours of content every day. My friend tried the public library and it was only a temporary reprieve from the ads on streaming platforms. The library simply didn't have enough content for her to watch.
That sizable collection is often scratched so you watch half the movie and then it skips or fails completely. Just like what used to happen constantly with DVDs from Netflix.
Not in my experience. My library's DVDs and Blu-rays work great. I check one out every week or two.
I'd encourage anyone reading to go to your local library if you haven't been in a while. Check out a book. See if they have a makerspace. Do some remote work there. They're wonderful places. They become more and more important with every passing year.
Not many of those left in my local libraries. They downsized to popular fiction and a rack of magazines to introduce more sofas and space for charity cake stalls. And "mindful colouring-in" if you're around for the 4.5 days of the week that they're open.
Libraries threw away the one thing that made them unique, curated knowledge, in order to compete with Starbucks as a "third space".
> The higher cost of the DVD/Blu-ray discs can be amortized over multiple repeat viewings.
For now. Physical media is being phased out. Sony just quitted the blu-ray player business after others also did and Disney already stopped releasing new discs in Australia.
That's why I stopped buying physical media years ago. Once I watch a movie, I've seen it. I don't really want to watch it again. And each viewing is a diminishing return, where I feel more and more like I'm just wasting time by doing it.
Music somehow is different, but movies, sporting events, dramatic series, etc. where the hook is that you don't know what's going to happen I can really only enjoy watching once.
I get most my physical media from the library. It really doesn’t get any cheaper than that.
A smaller portion comes from used bookstores. For TV series in particular it’s still very cost effective on a money per viewing hour basis. Especially for kids’ media because my kids do want to watch the same thing over and over.
I also do some à la carte rentals. Maybe 3-4 movies per year, so the total cost is low.
That said, you’re absolutely right, this only works for me because I don’t particularly care about new shoes and streaming exclusives. If you’re willing to take the view that media doesn’t need to be new to be good then we currently live in a post-scarcity society where video entertainment is concerned. Which isn’t to say that people who prefer new things are wrong, but I am genuinely impressed by the amount of enshittification that people will tolerate (maybe after some grumbling, but still) in the service of that preference.
>a database small enough to be served from a computer from the 90s?
Putting ~170 million .com records into a RDBMS on a 90s computer is not enough infrastructure to serve ~746 billion DNS queries a day : https://www.verisign.com/about-us/
They don't use off-the-shelf Redis/PostgreSQL/MySQL and they have more uptime reliability than Github, AWS us-east-1, Anthropic Claude, etc.
Verisign may still overcharge for what they do but nevertheless, the computing infrastructure isn't trivial.
>I frequently have to return clothing because there's absolutely no way of figuring out which size will fit you since nothing about sizes is standardized.
I used to take advantage of Amazon's return policy by deliberately buying 3 sizes of the same item (1 below and 1 above my expected size) because clothing manufacturers are not consistent with their sizing. I can then try them all at home to choose best size and return the other 2 that don't fit. I did this for pants, shoes, etc. This really seemed great because I hate going to the store and changing clothes in fitting rooms.
However, I stopped doing this many years ago because I found out that some online retailers like Amazon do not restock the returned items for re-sale and instead, throw it away so it eventually ends up in a landfill. In those cases, the sellers just eat the cost of unsold goods that got thrown out.
It seemed illogical to throw away perfectly good clothes that are still NEW but somebody explained that Amazon does this because they're paranoid about bodily fluids etc tainting the returns. So to play it safe, they just throw away the returns.
I have no more insider knowledge of how Amazon operates than you do, but judging on the amount of items I’ve received that were clearly used (stains, other people’s hairs, dust, dirt…) but sold as new I’m fairly certain they’ll resell everything that gets returns without even looking at the items.
I've returned clothes on Amazon and they told me just to keep it. I assume that's the equivalent of them just sending it to landfill. At least I can donate it to a local charity.
Also Zappos was clearly founded on the idea of ordering 3 pairs of shoes and keeping the one that fits. They say the returns go back for sale unless used and then go to charity/reuse, but happy to see other sources you have. I think a lot of that Zappos dna went into Amazon's policies.
I hate to break it to you, but this is true of returns across a lot of companies and product categories. If you return unopened wine to Costco, for example, they throw it out because they can't guarantee that you stored it properly.
>If you return unopened wine to Costco, for example, they throw it out
The food and groceries I already knew about. However, Amazon throwing out returned clothes was a surprise because I've seen clothing retailers like Macy's just put the returned items right back on the rack for re-sale. When you go to a shore store, they don't throw out every pair of shoes that customers tried on and didn't buy. So I just thought Amazon just did the same thing at their warehouse. I've also returned car wax to an OReilly's Auto store and I watched the clerk just put the bottle right back on the shelf for the next customer to buy.
It was disconcerting to find out I was adding to the landfill just because I returned clothes to Amazon. Nowadays, I don't order clothes from them unless I'm 100% sure I won't be returning it.
> because I found out that some online retailers like Amazon do not restock the returned items for re-sale and instead, throw it away so it eventually ends up in a landfill
This was essentially false, and FUD spread by the anti-Amazon crowd.
You will observe official Amazon Resale listings for many items, which is precisely Amazon restocking the returned items. For goods of any signficant value, it is bizarre to suggest that Amazon wouldn't be reselling them. Like, it's ludicrous to suggest they're tossing a $50 shirt instead of reselling it, as long as the return is in resale condition.
What Amazon sends to landfills is when items (mostly third-party seller items) aren't selling and the seller doesn't want to keep paying for warehousing or to have them shipped elsewhere so Amazon sends them to landfills. Because nobody is buying the items, there's no demand for them. Not everything sells.
Wherever you got the idea that they're paranoid about body fluids, that's somebody who doesn't know what they're talking about. People make up all sorts of things. That's why that have a small army of people inspecting returns.
>You will observe official Amazon Resale listings for many items, which is precisely Amazon restocking the returned items.
To clarify, I'm already aware Amazon re-sells returns. I often buy "Used Like New" electronics from Amazon Resale which are obviously customer returns that Amazon re-boxed. However, the category of clothes is different where it customer returns are often thrown out.
>What Amazon sends to landfills is when items (mostly third-party seller items) aren't selling and the seller doesn't want to keep paying for warehousing or to have them shipped elsewhere so Amazon sends them to landfills.
No, that's not the full story. What's also happening is that a seller has different options for Amazon's reverse logistics and they have different costs.
E.g. pay $1.50 for Amazon to inspect and resell or pay a lower $0.52 to throw it away. A lot of sellers just pay 1/3rd less and let Amazon throw it out.
That possibility of me inadvertently adding to landfills is enough to stop me from buying 3 sizes and returning 2. Maybe in some circumstances the other 2 returned items won't be thrown out -- but I can't know for sure so I won't do it. I'll continue to buy clothes from Amazon but only do so when I'm 100% sure I'm going to keep it no matter what.
If you're talking about some $4 item then sure. But most clothing on Amazon isn't $4. If you're buying $30 or $60 items then they are most definitely having them inspected.
Because it's not about $1.50 for inspection vs $0.52 to throw it out.
It's about -$1.50 + $8 profit = $6.50 gain for inspection vs. -$0.52 + $0 profit = $0.52 loss for throwing it out.
You're missing the entire resale price on the return. Companies aren't leaving money on the table. They are looking to maximize profit and minimize losses. In most places, sending resellable stock to the landfill isn't doing that.
On the surface of it, it would appear not to make sense. Why would Amazon take on the cost of handling a return item that they will have to dispose? They could just indicate to the user to keep the item --- and that in fact does happen! I had a return like that just this past week.
However, there is an obvious incentive to minimize these no-return refunds and require users to print labels and go through the motion of returning items that won't be restocked.
It discourages fraud: people abusing the no-return refund as a way of getting free stuff!
The no-return refund has to be a kind of perk for the customer who rarely returns anything or whatever.
I would say that it would be astonishing if Amazon pretending to accept returns and then throwing away is a thing that absolutely does not happen, and honestly cannot blame them for it. We are a throw-away-stuff society, and Amazon is not outside of that society.
> We are a throw-away-stuff society, and Amazon is not outside of that society.
What Amazon does with returns doesn't have anything to do with what kind of "society" you think we are.
What it does with returns is determined by the profit motive.
And in most cases, the more profitable thing to do is to resell returned merchandise. Yes, return inspections cost money, but usually less money than what is gained by reselling the item.
Returned merchandise has value, and businesses don't make profit by throwing value away when they can make money with it or reduce losses with it instead.
I genuinely don't understand all the people who think it's more cost-effective for Amazon to send a $50 shirt to the dumpster rather than resell it. That's not how anything works.
What individuals do is also motivated by profit or profit-adjacent motives. Saving money is a profit motive; so is saving time and convenience.
> It's more cost-effective for Amazon to send a $50 shirt to the dumpster rather than resell it.
It's not a $50 shirt. It's like a $5 shirt to them, which some sucker is willing to pay $50 for. Used, it becomes a $10 shirt.
A dumpster can be found right in the neck of the woods of where the returning customer lives, whereas it may have to travel far and pass through more processing if it goes to another customer elsewhere.
It needs to be inspected, repacked.
There is a risk in every returned item. Sometimes people return a perfectly good item. But sometimes it's because there is something wrong with the item, such that the next buyer is also likely to return it, even if they get it cheaper.
Basically returned items are entirely outside of the profit-optimized delivery path. They incur costs and risks, at a reduced revenue.
I'd never return an item which matches the description and isn't damaged.
If it isn't damaged in any way but does not match the description, that's a problem; if it is sold with the same description, the next customer will also see that it doesn't match. A new listing has to be created for that product. Not gonna happen, or not in the processing time frame of that particular return.
Not wanting to throw away is sunk cost thinking, which represents how emotional consumers operate. Not businesses like Amazon.
How a business operates is:
1. Going forward, ignoring the prior costs associated with the item, is there an expectation that the item will bring in more revenue than what it costs to further handle and move it? (Taking into account its adjusted price, and the probability that it will be returned again by a new buyer?)
2. Is that profit good enough to justify taking away logistics resources from some new item? In every situation in which a returned item is being moved or handled, it displaces a new item that is not being moved or handled.
The point of the $5 is not to discuss a sunk cost, but to point out that producing a new item isn't expensive. If producing a replacement item is expensive, that means that a new item is less profitable than if it were cheaper to produce. If a new item is less profitable, then the returned item has a lower bar of profitability to pass in order to be viable.
But a returned item is likely not even compared to an identical item anyway, but to some average profitability of moving any item whatsoever which has around the same size and weight.
>If Amazon is selling a shirt for $50, then they are probably acquiring it for $25-30. Believe me, they don't want to throw away that $25-30.
The key you're missing is Amazon didn't have to spend that ~$25 in the first place.
I'm guessing your assumption of Amazon's out-of-pocket cost is the source of your insistence that Amazon is determined to restock and re-sale instead of throwaway. That mental model of how big retailers operate is incorrect.
The giant retailers like Amazon/Walmart/Target don't pay upfront for merchandise. Instead, they use a complicated "chargeback model". They just deduct customer returns from the ongoing rolling invoices "net 90" etc.
So, Amazon doesn't really "lose money" for customer returns if they don't re-stock & resell. It's the manufacturers and sellers that take the financial hit. (Which would be the much lower ~$5 instead of $25.) The above chargeback model is why Amazon was so nonchalant about throwing away perfectly good items that were returned by customers. Amazon wasn't incentivized to bother trying to re-sell it. Instead of taking a risk with a tainted customer return, just mathematically deduct it from the next vendor's payment. No ~$25 wholesale cost needs to be "recovered" because Amazon never spent it.
>That's not how businesses operate.
It is (or was) how they operated. That isn't FUD. Canada, France, Germany did investigative reports with hidden cameras and GPS trackers to discover that billions in Amazon merchandise was being dump at landfills and/or burned at incinerators. (What Amazon euphemistically calls "energy recovery"). This includes lots of expensive items that were more than ~$4 such as new coffee machines. The public relations backlash at Amazon destroying so much product was so bad that France passed a new law targeted at Amazon to stop doing it: https://www.google.com/search?q=amazon+france+passes+new+law...
That's when Amazon started a more earnest "re-sale or donate" and reduce the destruction of customer returns.
You seem to be greatly confused. Amazon most certainly does not generally operate on a consignment model nor does it avoid paying manufacturers for returned merchandise.
It is true that it may pay suppliers only 90 days later or something, but this doesn't change the fact that they still have to pay suppliers.
I genuinely don't know where you are getting your information from, but it is quite wrong.
And as I said before, the stuff that Amazon sends to landfills, has a little to do with the fact that it has been returned (except for things that are so damaged they cannot be resold), and everything to do with the fact that there is no longer demand for it and they need their warehouse space for products that sell better.
It's as if you're starting to understand that trying to peddle the returned item is not profitable, given all the costs involved. Recovering it from the user: cost. Sending it to new user: cost. Probability it will be returned again: cost. Reduced retail price: revenue hit.
Say Amazon projected a $25 profit on the item originally based on a revenue of $50. Meaning their total cost had to be $25: procuring the item and shipping it. That didn't work out; so at that point they have a loss of $25.
That doesn't matter; it's all sunk costs at that point.
They have an opportunity to recover the item from the user. How profitable will it be? Let's say there is 60% chance that the item is junk that the next user will also return. Let's say it costs $5 to ship it back to Amazon, and another $5 to ship it to a new user. Let's say it can only be sold for $35 and not $50.
The probability of keeping the $35 revenue is 40%, and so the expected revenue is 0.4 times 35 or $14. We have to subtract the shipping both ways, leaving $4.
Thus the new business venture of recovering the item and reselling it has an expected profit of $4.
This is a waste of time, even though the profit is nonzero.
It is better to procure a new item and make $25.
A truck full of items that make $25 is better than one full of the same items that make $4.
It's as if you continue to double down on not understanding.
Your figures are all extremely exaggerated. If it's a normal piece of clothing, there isn't a 60% chance the next user will also return it. It costs nothing close to $5 to send something back when it's dropped off at Whole Foods or Staples or whatever, and Amazon's shipping costs are also much less than $5. Many items are resold at full price as well. You're also double-counting -- new items have a risk of getting returned as well (obviously), and there's the same shipping price in sending out returned items as used items.
Obviously when it is no longer profitable to resell a return, it gets discarded. Obviously, this happens when the return is too damaged or defective.
But you also have to realize that there are a lot of people who are willing to buy an open-box scratched item for 60% off, who simply can't afford the full-price item new. And a lot of people who will never buy the open-box scratched item under any circumstances. Selling returns allows Amazon to make money off both.
Just think about it this way: once we write off the sunk costs of a return, Amazon basically has zero-cost merchandise on its hands. If you think of it that way, then they can make more profit off the returned item than off the original. They're no longer making their expected $25 profit, they're making $50 profit, in your example. It would be business insanity to throw those items away instead.
>Amazon most certainly does not generally operate on a consignment model
No, not a consignment model. A "chargeback model".
>, but this doesn't change the fact that they still have to pay suppliers.
Not for the returned items. The returned items are deducted from the next unpaid vendor invoice. (The "vendor chargeback" or "vendor clawback" in industry parlance). All the big retailers with leverage such as Walmart/Amazon/Target/HomeDepot/BestBuy etc do this. It makes the financial hit from customer returns mostly the vendors' problem instead of Amazon's.
>, has a little to do with the fact that it has been returned (except for things that are so damaged
The new law in France was trying to stop Amazon from destroying undamaged products because of investigative reports. Again, Amazon didn't care about sending undamaged returned merchandise to the landfill by the truckloads because of the chargebacks above. In other words, Amazon never "bought" the items the customers returned.
If it was expensive items like electronics, they would ship it back to the supplier or a liquidator for resale but that often didn't happen for clothes because it wasn't worth it the extra costs to the supplier. That's why a lot of it went to the landfills.
The chargeback model does not operate the way you are describing.
Yes, major retailers have various agreements with manufacturers. Sometimes it's return-to-vendor, because the manufacturer wants the returned items back in order to refurbish and resell itself, etc. Sometimes there are return allowances, such as a 3% rate, meant to cover an expected return rate regardless of return reason, or they negotiate with Amazon for it to determine which returns are genuinely defective, and then those and only those get effectively reimbursed.
But it is completely false to say that Amazon is generally able to pass on the cost of all its returns to manufacturers, that this makes returns zero-cost for Amazon, and that it therefore just tosses returns in landfills. That's not how anything works. Neither manufacturers nor Amazon have any kind of financial incentive to just dump returned merchandise that can still be profitably resold.
>But it is completely false to say that Amazon is generally able to pass on the cost of all its returns to manufacturers, that this makes returns zero-cost for Amazon,
The vendor agreements say if the returns are Amazon's fault, they will not deduct from remittances. If you're a vendor/seller, you use the Amazon Vendor Portal to look at the account status of invoices, purchase orders, inventory, returns, payments, deductions, etc: https://vendorcentral.amazon.com/
When a customer returns something, they can pick from a menu of reasons such as "not as described", "changed my mind", or "wrong size", etc. For those reasons, the amount is always deducted from the seller's account because none of those reasons are Amazon's fault. (Again, Amazon didn't spend the ~$25 for $50 shirt that they're desperate to recover as you're claiming.) In many cases, the seller doesn't want to pay extra to ship the returned items back so they just let Amazon throw it away. That's how a high volume of perfectly resellable items end up in the garbage -- especially before the bad publicity in 2019. Amazon has reduced the environmental pollution of customer returns by giving more options to sellers to restock and resell but it's still not totally eliminated.
EDIT to reply: >Under first-party, Amazon is still purchasing the goods wholesale. Amazon absolutely spent the $25 for the $50 shirt. That is just how it works.
In a 1P relationship (not 3P), Amazon will deduct the wholesale $25 amount caused by customer returns from the next payment to the vendor/supplier. That's how it works. Yes, Amazon acting as 1P buys wholesale -- but they can also deduct the wholesale amounts owed to the supplier for customer returns that are not their fault.
I can't copy&paste the Amazon 1P vendor agreement but here's a similar one from Costco and notice the verbiage:
>14. CUSTOMER RETURNS. Costco may pursuant to Section 13.1 reject or revoke acceptance of and return to Supplier any Product returned by Costco’s customers. For any Products returned by customers, Costco reserves the right to return such Products to Supplier or to salvage, donate, dispose of, re-use, refurbish or recycle such Products at Supplier’s sole cost and expense.
Similar wording for the big retailers like Walmart, Target, etc.
>Nobody on either side is throwing away perfectly good, sellable merchandise just for the fun of it.
You keep repeating this but the investigative reports with GPS trackers put inside new items immediately returned to amazon to trace where they go and hidden cameras at landfills and industrial shredding facilities that receive truckloads of Amazon customer returns shows otherwise. The volume of it has been reduced somewhat, but not eliminated. Amazon doesn't throwaway all resellable items, but they still throw away a lot of it.
OK, so you're clearly confusing two entirely separate things.
When you talk about being "deducted from the seller's account", you're talking about its third-party marketplace business. But when you talk about Vendor Central, you're talking about Amazon's first-party wholesale business.
Under first-party, Amazon is still purchasing the goods wholesale. Amazon absolutely spent the $25 for the $50 shirt. That's just how it works. That's the main discussion we're having. For you to claim otherwise is just flat-out wrong.
The drop-down about the return reasons, and about a seller choosing what to do with returned merchandise, that's about the third-party marketplace. That's a totally separate discussion, but it has nothing to do with the chargeback model you were talking about, and those are decisions sellers are making, not Amazon. And sellers are still making those decisions based on what is most profitable. If an item is "perfectly resellable", then they're still being restocked and resold. Nobody on either side is throwing away perfectly good, sellable merchandise just for the fun of it. If they think there's value in it, it gets resold.
Also:
>> Nobody on either side is throwing away perfectly good, sellable merchandise just for the fun of it.
> You keep repeating this but the investigative reports with GPS trackers put inside new items immediately returned to amazon to trace where they go and hidden cameras at landfills and industrial shredding facilities that receive truckloads of Amazon customer returns shows otherwise. The volume of it has been reduced somewhat, but not eliminated.
Just because it happened once with some items doesn't mean it's a pattern. Obviously, journalists are looking for a "gotcha" here. They're focused on finding the times when Amazon misclassified returns, or when the item is no longer selling, or whatever. They're not writing up stories when their GPS trackers showed that the items got resold.
You're trying to push an agenda here, and I'm done talking. You are falsely mischaracterizing how Amazon returns work and the financial incentives. I'm not saying Amazon doesn't throw out some returns that aren't worth reselling -- literally all retailers do this -- but this narrative that it's somehow magically cheaper for Amazon to just throw out otherwise resellable returns as a matter of standard practice is just false.
No agenda. I've been a Amazon customer for almost 30 years and not trying to run a smear campaign. I buy from them every week. I'm just explaining why I've revised my thinking about the "shopping hack" of buying 3-and-return-2 that I used to think was harmless and supposedly a "win/win" for both me and Amazon. My intuition thought Amazon would always restock and resell the other 2 was wrong. Maybe they will but there's a good chance they won't and I'm not interested in being the cause of more environmental pollution. So I try to be more conscientious and avoid frivolously returning things.
Several reasons combine to cause the "illogical" disposal of undamaged returned goods:
- delayed vendor payments (NET90) and how Amazon can deduct the cost of customer returns. That the hidden "perverse incentive" that reduces Amazon's "skin in the game" and motivation to resell it. They're no longer financially on the hook to pay wholesale costs for those returns.
- vendor calculates it's not worth the cost of re-inspecting and re-stocking the merchandise. If the NEW item is now OPEN BOX and must be priced much lower, it negatively affects the ROI calculation even further.
- vendor decides that the extra risk of customers tainting the returned items and causing the next customer to leave a 1 start review (which lowers future sales) is not worth it
The above factors are especially relevant to clothes. I'm ok buying and then returning a Bosch power drill for $200 because I'm confident that the reverse logistics will go through a liquidator instead of the landfill. However, I don't have the same confidence for a $50 shirt. It's the ~$5 vendor's cost not the $25 wholesale cost that must be used as basis for calculating ROI of risk-vs-resale and we have to be realistic that will often favor the landfill.
>Why is a purchase ever in such a hurry? Short delivery only really encurrage impulse purchases.
We never do impulse buys for frivolous throwaway consumerism junk but fast ~2 day delivery is still very helpful because... Life Happens ... such as stuff unexpectedly breaking and you want to have a replacement to quickly fix it.
Example of 2 events just in the last month: (1) garage door screw coupler broke. It's the piece that connects the motor shaft to the screw drive. You cannot buy this type of oddball part from Home Depot or Lowes. Amazon had it and delivered it the next day so I was able to repair the door immediately. The alternative of waiting a week+ for slower delivery means the door has to be disengaged from the track so it can be manually raised and lowered. This is not acceptable because I don't have the specific key to the garage locking mechanism from the outside. Why don't I have a key?!? Because life happens. I guess I could manually lock it from the inside and leave the car outside the garage for a week but I didn't like the idea of leaving a catalytic converter exposed to drive-by theft.
(2) was my Skechers work boots had the sole separated from the shoe. I bought the same model shoes from Amazon for $59.99 and had it in 2 days. I could drive to the local Skechers store but they charge $79.99. So either wait a week+ for slow delivery or pay $20 extra plus round trip gas money to buy at the local store.
Amazon quick delivery acts as a JIT (Just In Time) inventory system to take care of unexpected things that happen in life. That's a more sane alternative than holding a bunch of inventory of random parts for things that might go wrong.
Btw, Amazon often offers extra reward points credited to your account if you voluntarily choose slow delivery instead of 2 days. This is what we do the majority of the time. I assume Amazon does this pseudo "cashback" incentive as a way to consolidate as many customer orders as they can to optimize their delivery routes and reduce costs.
If you're in a Nielsen "A" market like 40% of the population you have a Sketchers store in your area. I'm in a "C" market, a college town with post-material values, and the local stores suck. (Great thrift stores and vintage clothes but if you want something new it is Target or Wal-Mart or the overpriced Haberdasher that will get you something appropriate for a wedding but 'not special' in my mind)
4k? That might have something to do with it. Though given a big enough box that too shouldn't be an issue. But I'm using a decade+ old thinkpad driving a fairly high res dell and it works well enough.
I sometimes have difficulty with YouTube 4K on Firefox on my Mac Studio (M2 Max with 64GB). I don't really care though, because 1440p is always well and truly good enough. (And really 1080p is more than good enough except that the default bitrate is absolute dogshit. Most of the time I'm choosing 1440p is because it's bitrate is not dogshit.)
If you dissect the timeline of the events and various statements, I think the 2nd affair with a subordinate employee K Powell was the reason to fire Jensen Huang -- more so than the allegations of secretly selling to China.
This is the timeline:
Before Nov 11, it looked like NVIDIA might try to ride out the storm and keep Jensen at the helm especially if they saw that the China accusations and evidence wasn't strong enough to be a problem. Again, it was totally unnecessary for the board to publicly back him up if they had plans to get rid of him because of China allegations. However, the Board of Directors emergency Nov 11 meeting is inconsistent with the Nov 8 statement affirming Jensen's leadership.Nov 8 was coordinated with carefully crafted communications showing that Jensen and BOD were aligned. Contrast with Nov 11 being chaos and an emergency meeting convened.
Reading between the lines, what probably happened is that Jensen didn't come totally clean with the board on Nov 8 and tell them about the 2nd K Powell affair. Instead, the board got totally blindsided and lost trust in him. (Is there another 3rd secret affair he's hiding from us?!?) It was impossible to keep Jensen under those circumstances.
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