When tech founders leave, what happens to their companies?
Nvidia has named Colette Kress as interim CEO following Jensen Huang's resignation, while also appointing Harvey Jones as the company's first-ever board chair.
The changes mark a major overhaul of Nvidia's corporate structure and leadership, which Huang has dominated since cofounding the AI chipmaker in 1993. A powerful figure in Silicon Valley, he stepped down following reports of his affairs with a suspected Chinese intelligence operative and two employees that have drawn scrutiny from United States lawmakers, the company's board and shareholders.
Despite the shakeup, the question remains how much of Nvidia's nearly $4 trillion value was pegged to its longtime leader, who is synonymous with the company's exponential growth. Dan Ives, an analyst at Yorkville Ives, predicted that Nvidia's value could decline 25 to 30 percent without Huang at the helm.
Founder Dependency
Historically, executives across corporate America have been beholden to shareholders, who hold executives accountable. In Silicon Valley, however, companies have often been built around a founder's vision – as was the case for Nvidia.
Analysts have long maintained that the success of companies like Nvidia hinges on the success and vision of their founder. A report from Bain and Company found that founder-led companies perform 2.1 times better than companies that are not led by their founders between 2015 and 2025, and when it comes to tech, that jumps to 2.6 times.
When it comes to succession, the data shows that, as great as these founders are, it's incredibly rare for their successors to do as well as the original founder. So I wouldn't necessarily call it a risk. It's simply the evolutionary life cycle of building a company.
Tech Giants' Leadership
Silicon Valley has long embraced this model, with companies such as Meta and Tesla built around the vision and personalities of their founders. Musk came under scrutiny from the board at Tesla as his attention was divided among a growing portfolio of businesses, which was a distraction from the company.
Musk's increasingly public political activities became a source of controversy for Tesla, with the company facing protests at its showrooms amid damage to its brand image and declining vehicle sales. In the first quarter of 2025, Tesla deliveries fell 13 percent year over year to their lowest level in nearly three years.
Ultimately, Tesla's board opted not to remove him. However, his other company made changes to its governance structure that made it essentially impossible for the board to fire him when SpaceX prepared to go public earlier this year.
Nvidia's Unique Structure
Nvidia's management structure was heavily centred around Huang. He had dozens of executives reporting to him directly rather than operating within a more traditional hierarchical chain of command.
Under Nvidia's bylaws, Huang could be removed by the 11-person board of directors "with or without cause", as they hold a majority of votes. Unlike other tech giants, Huang does not have outsized control. Huang owns about 3.6 percent of the company and does not have majority voting power.
The company appointed Kress as its interim CEO. She previously served as Nvidia's chief financial officer. Nvidia has continued to make investments in AI infrastructure, just this week agreeing to purchase $10bn worth of shares in a private placement ahead of Anthropic's blockbuster IPO next week.
Founder Departures
Historically, when a founder leaves, it hurts the direction of the company and can sway its competitive advantage in the market. In the 1980s, after a power struggle between Apple founder Steve Jobs and then CEO John Sculley, the company struggled for a decade.
Starbucks faced a similar setback after founder Howard Schultz stepped down as CEO in 2000. He handed leadership to Orin Smith, the company's then-president and chief operating officer. The Seattle-based coffee shop chain continued to grow under Smith, but struggled after he retired in 2005 and was replaced by Jim Donald.
However, founder-led companies are not necessarily destined for a downturn when their founders leave. At Microsoft, Bill Gates stepped down as CEO in 2000, with Steve Ballmer succeeding him. After Ballmer retired in 2014, Satya Nadella took over and shifted the company's focus towards cloud computing and enterprise software – a move that helped its market capitalisation grow from approximately $302bn in 2014 to $3.88 trillion in November 2026.
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