{"id":16270,"date":"2026-11-14T15:04:05","date_gmt":"2026-11-14T15:04:05","guid":{"rendered":"https:\/\/sotnews.agency\/?p=16270"},"modified":"2026-11-14T15:04:05","modified_gmt":"2026-11-14T15:04:05","slug":"when-tech-founders-leave-what-happens-to-their-companies-explainer-news","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=16270","title":{"rendered":"When tech founders leave, what happens to their companies? | Explainer News"},"content":{"rendered":"
\n
\n \t<\/i> Read Time:<\/span>6 Minute, 34 Second <\/div>\n\n <\/div>


\n<\/p>\n

\n

In the wake of Jensen Huang\u2019s resignation as CEO of the artificial intelligence giant Nvidia, the company has brought in a new interim chief,<\/a> Colette Kress<\/a>, who has been with the company since 2013.<\/p>\n

Along with Kress, the AI bellwether appointed its first-ever board chair, Harvey Jones, a venture investor with three decades of tech industry experience.<\/p>\n

\n

Recommended Stories <\/h2>\n

list of 3 items<\/span>end of list<\/span><\/section>\n

The changes mark a major overhaul of Nvidia\u2019s corporate structure and leadership, which Huang has dominated since cofounding the AI chipmaker in 1993. A powerful figure in Silicon Valley, he stepped down<\/a> on Thursday following reports of his affairs with a suspected Chinese intelligence operative and two employees that have drawn scrutiny from United States lawmakers, the company\u2019s board and shareholders.<\/p>\n

Despite the shakeup, the question remains how much of Nvidia\u2019s nearly $4 trillion value was pegged to its longtime leader, who is synonymous with the company\u2019s exponential growth. Dan Ives, an analyst at Yorkville Ives, predicted that Nvidia\u2019s value could decline 25 to 30 percent without Huang at the helm.<\/p>\n

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\u2019s vision \u2013 as was the case for Nvidia.<\/p>\n

Why do tech companies put so much faith in their founders?<\/h2>\n

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.<\/p>\n

\u201cWhen it comes to succession, the data shows that, as great as these founders are, it\u2019s incredibly rare for their successors to do as well as the original founder. So I wouldn\u2019t necessarily call it a risk. It\u2019s simply the evolutionary life cycle of building a company,\u201d Michael Monaghan, portfolio manager of Founders 100 ETF, told Al Jazeera.<\/p>\n

Silicon Valley has long embraced this model, with companies such as Meta \u2013 Facebook and Instagram\u2019s parent company \u2013 and Tesla built around the vision and personalities of their founders.<\/p>\n

\u201cIt\u2019s a common challenge among tech giants. You can ask: What does SpaceX look like without Elon Musk? What does Meta look like without Mark Zuckerberg? I think the same principle applies here, particularly in an emergency situation like this,\u201d Xiaomeng Lu, director of geo-technology at the Eurasia Group, told Al Jazeera.<\/p>\n

Musk came under scrutiny from the board at the electric vehicle maker as his attention was divided among a growing portfolio of businesses, which was a distraction from the company.<\/p>\n

Musk\u2019s increasingly public political activities<\/a> with the administration of US President Donald Trump 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.<\/p>\n

Ultimately, Tesla\u2019s 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.<\/p>\n

Musk was expected to retain approximately 82 percent of SpaceX\u2019s total voting power after the IPO, despite selling shares to outside investors, a move that gave him control of who sits on the board, a role that is supposed to oversee the CEO. The Texas-based aerospace giant wrote into its charter that removal requires approval from holders of its special class of shares, and because Musk owns the majority of those shares, he can veto his own firing.<\/p>\n

For Nvidia, Huang\u2019s leadership often paid off. Nvidia invested heavily in graphics processing and helping build out data centre infrastructure amid a rapid expansion in the AI sector.<\/p>\n

Nvidia has continued to make those kinds of investments. Just this week, the company agreed to purchase $10bn worth of shares in a private placement ahead of Anthropic\u2019s blockbuster IPO next week.<\/p>\n

Who is in charge of Nvidia?<\/h2>\n

Nvidia\u2019s 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.<\/p>\n

Under Nvidia\u2019s bylaws, Huang could be removed by the 11-person board of directors \u201cwith or without cause\u201d, 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.<\/p>\n

Nvidia\u2019s structure is unique among major Silicon Valley companies.<\/p>\n

Meta and Alphabet, for example, have special stock arrangements that give their founders more voting power than their actual ownership stakes would normally provide. As a result, founders like Zuckerberg can maintain control over who sits on the board, which can make it more difficult for shareholders to challenge leadership decisions.<\/p>\n

This means that while Huang had enormous influence over Nvidia\u2019s direction, he did not have the same formal voting control wielded by other major tech founders.<\/p>\n

The company appointed Kress as its interim CEO. She previously served as Nvidia\u2019s chief financial officer.<\/p>\n

What happens when a founder leaves?<\/h2>\n

Historically, when a founder leaves, it hurts the direction of the company and can sway its competitive advantage in the market, and it has happened several times in corporate history.<\/p>\n

In the 1980s, after a power struggle between Apple founder Steve Jobs and then CEO John Sculley, the company struggled for a decade. By 1997, the tech giant was on the brink of bankruptcy, with nearly $1bn in losses that year.<\/p>\n

\u201cWhen Apple\u2019s founder Steve Jobs left the company for the first time, Apple experienced a major downturn, eventually prompting the board to invite him back,\u201d Lu said.<\/p>\n

When Jobs returned to the company, the Cupertino, California-based tech giant\u2019s luck began to change and led to the launch of its most well-known products, including the iMac and the iPhone.<\/p>\n

Starbucks faced a similar setback after founder Howard Schultz stepped down as CEO in 2000. He handed leadership to Orin Smith, the company\u2019s then-president and chief operating officer.<\/p>\n

The Seattle-based coffee shop chain continued to grow under Smith, but struggled after he retired in 2005 and was replaced by Jim Donald. Amid slowing sales and increased competition, Starbucks lost more than 80 percent of its value.<\/p>\n

In January 2008, Schultz returned as CEO and launched a turnaround effort that included closing hundreds of underperforming locations.<\/p>\n

However, founder-led companies are not necessarily destined for a downturn when their founders leave.<\/p>\n

Jobs, who left the company in 1985, returned in 1997 and led its subsequent turnaround before handing the reins to former CEO Tim Cook in 2011. Under Cook, Apple continued to grow, briefly surpassing a $5 trillion market capitalisation in July 2026.<\/p>\n

At Microsoft, Bill Gates stepped down as CEO in 2000, with Steve Ballmer succeeding him. After Ballmer retired in 2014, Satya Nadella took over.<\/p>\n

Nadella shifted the Redmond, Washington-based tech giant\u2019s focus towards cloud computing and enterprise software \u2013 a move that helped its market capitalisation grow from approximately $302bn in 2014 to $3.88 trillion in November 2026.<\/p>\n

Nvidia faces another issue, and that is that much of the AI sector\u2019s growth is pegged to its powerful chips.<\/p>\n

OpenAI, which is eyeing an IPO, has up to $100bn worth of planned financial agreements with Nvidia. Nvidia has also agreed to invest $10bn in Dario Amodei-led Anthropic through a private placement tied to its planned US IPO, which could take place as early as next week.<\/p>\n<\/div>\n\n

\n
\n \n
\n \n \"Happy\"\n <\/a>\n
\n Happy <\/div>\n
\n 0<\/span>\n \n 0<\/span> %<\/span>\n <\/div>\n <\/div>\n\n
\n \n \"Sad\"\n <\/a>\n
\n Sad <\/div>\n
\n 0<\/span>\n 0<\/span> %<\/span>\n <\/div>\n <\/div>\n\n
\n \n \"Excited\"\n <\/a>\n
\n Excited <\/div>\n
\n 0<\/span>\n 0<\/span> %<\/span>\n <\/div>\n <\/div>\n\n
\n \n \"Sleepy\"\n <\/a>\n
\n Sleepy <\/div>\n
\n 0<\/span>\n \n 0<\/span> %<\/span>\n <\/div>\n <\/div>\n\n
\n \n \"Angry\"\n <\/a>\n
Angry<\/div>\n
\n 0<\/span>\n 0<\/span> %<\/span>\n \n <\/div>\n <\/div>\n\n
\n \n \"Surprise\"\n <\/a>\n
Surprise<\/div>\n
\n 0<\/span>\n 0<\/span> %<\/span>\n <\/div>\n <\/div>\n\n <\/div>\n <\/div>\n\n ","protected":false},"excerpt":{"rendered":"

In the wake of Jensen Huang\u2019s resignation as CEO of the artificial intelligence giant Nvidia, the company has brought in a new interim chief, Colette Kress, who has been with the company since 2013. Along with Kress, the AI bellwether appointed its first-ever board chair, Harvey Jones, a venture investor with three decades of tech…<\/p>\n","protected":false},"author":1,"featured_media":16271,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_2277560469115098_106292521332774":"","twitter_aToxNzczMzI3Njk4OTg4ODUxMjAxOw==_1773327698988851200":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","_monsterinsights_skip_tracking":false,"_templately_pack_id":"","_templately_imported_at":"","_templately_source":"","_templately_import_session_id":"","footnotes":""},"categories":[11],"tags":[],"class_list":["post-16270","post","type-post","status-publish","format-standard","has-post-thumbnail","category-international-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t