Jensen Huang summoned his top finance executives to his office this summer. The AI economy, backstopped by Nvidia’s increasingly outrageous bets, was teetering, and Huang wanted to make sure they were getting it right.Jensen Huang and Colette KressOver the course of the meeting, he proceeded to tear into the woman who is now taking over for him as Nvidia CEO.Colette Kress was “a deer in the headlights,” he said, interrupting her presentation, according to a person familiar with the comments.He had summoned Kress and his senior finance team to diagnose a ballooning problem: Nvidia was in talks to provide billions of dollars of guarantees to companies that couldn’t afford its chips.

That included deals led by Huang’s son-in-law, Nico Caprez, who had been offering upstart cloud providers and data-center developers financing in the hopes of turning them into long-term customers.Huang had launched a dealmaking spree and was now starting to question whether it had gone too far, according to people familiar with the matter.Kress was a “reporting CFO,” not someone who could help him define a strategy or make decisions, Huang said during the August meeting.Then he went on to describe the situation the company was in. Major cloud providers were running away from Nvidia, making plans to use alternative chips and lessen their reliance on the firm.

Even worse, Huang said, the vast supply of chip wafers and memory Nvidia had committed to buying were coming at him like an “avalanche.”Kress now has to steer Nvidia through that avalanche—and a bigger one. She was named interim chief executive Thursday, taking over for Huang, who resigned after revelations of two extramarital affairs, including one with a suspected Chinese spy and another with an employee.Kress will need to stabilize a company facing federal and internal investigations.

One of the largest companies in the world didn’t have a clear successor lined up. It has said it will look at internal and external CEO candidates.In a memo to staff Thursday, Kress praised Huang, saying she will continue “building on the extraordinary foundation Jensen created over the last 33 years.”Kress joined Nvidia more than a decade ago as chief financial officer after holding finance roles at Cisco, Microsoft and Texas Instruments.A graduate of the University of Arizona, she got her M.B.A. from Southern Methodist University in 1996, according to her LinkedIn page.

She married David Kress, a former Microsoft executive who got his start in the company’s mailroom. They have two sons.The finance chief has said she was drawn to Nvidia because of Huang, whom she described as a visionary, and a culture she described in a 2018 awards ceremony interview as “essentially egoless.”Huang ran a relatively flat organization, with about 60 direct reports, including Kress.

Over the last five years the company’s valuation has soared from less than $1 trillion to a high of $5.8 trillion in October.At times, its heft has put Kress in a tough position as CFO.In the spring, Huang’s son-in-law Caprez and another vice president Raj Mirpuri told prospective business partners that Nvidia could arrange credit-support deals within a couple of weeks. Dozens of companies lined up for this program, hoping Nvidia’s backing would lower their borrowing costs.

In exchange for providing credit support, Nvidia proposed that cloud providers share a cut of their revenue.Amid the rollout of the program, Kress raised questions including how to decide which deals to pursue, how to value the guarantees, and how to calculate the return on investment, a person familiar with the matter said. Behind the scenes, she tried to rein in Huang’s son-in-law, who had been promoted to a vice president in January, people who worked with her said.Nvidia pushed ahead.

The company was in talks with OpenAI to provide a financial backstop for the largest data-center deal ever, an Ohio facility that would be the largest in the world.OpenAI was in talks to lease the entire campus, which it would fill with around $300 billion worth of Nvidia chips. Nvidia would provide a financial backstop that would make banks feel more comfortable about lending money, given that OpenAI was on the hook for the lease payments.The talks stretched into late summer.

On July 26, The Wall Street Journal reported that Nvidia was considering providing a $250 billion backstop for the project. The next day, Nvidia shares fell by 5%, wiping out $250 billion in market value.Though Nvidia and OpenAI had been close to closing the deal, over the next couple of weeks, Kress reworked the deal and cut Nvidia’s initial financial commitment to OpenAI in half, people familiar with the deal said.

And Nvidia and OpenAI signed the downsized deal on Aug. 17.In the following days, Huang pressed his staff to develop a way to decide whether a guarantee was worthwhile, asking them to factor in the chip sales it could generate.Nvidia paused some deals in a new financing initiative that offered credit support to artificial-intelligence cloud providers in exchange for a share of revenue, The Wall Street Journal reported in late August.When communicating the pause to customers, Caprez and Mirpuri told multiple cloud companies that financial support deals were increasingly being reviewed by Nvidia’s executive team, as well as its board of directors, making them harder to close quickly, according to people familiar with the matter.Kress publicly defended Nvidia’s role as a banker to the broader AI industry from critics who argue Nvidia’s efforts to prop up demand across the industry has left it more vulnerable to a downturn.

Kress has characterized the deals as savvy investments.“We recognize the scale of this support, and we know some will call this circular financing. We see it differently,” she said in late August. “The equity returns on our invested capital will be excellent.”Huang has told confidants privately that he was increasingly frustrated with Nvidia’s stock market valuation.

Nvidia’s average monthly stock multiple fell from 23 in May to 16 in October. Other big tech companies get much higher multiples in the market.Nvidia took steps to appease worried investors, including the largest stock buyback in history.By October, Nvidia started to turn off the tap.In Berlin during a conference, Huang, accompanied by his top sales executives, broadcast a new message to a half-dozen CEOs of companies that are major buyers of Nvidia chips who were seated around a circular table.

He opened with a story that sounded like a fable, according to people who attended.Huang had once found a soup vendor in Japan, he said, with a long line of customers. He joined the line, and after a long wait, enjoyed one of the best bowls of soup he’d ever had.

When he asked for another serving, the soup-seller told him no—he had too many customers waiting and not enough soup for all of them.“He’s a better businessperson than all of you,” Huang told the cloud computing CEOs. The soup-man doesn’t sell out all his inventory to one or two customers, but instead keeps prices high and his customer base diverse, the CEO said.“You are not establishing the value of my products,” he said.