In the world’s leading group
Nvidia boss has a radical leadership style
May 2, 2024, 2:44 p.m
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Jensen Huang has dozens of managers report directly to him instead of just a handful. In addition to flat hierarchies, the CEO of the world’s largest chip developer claims maximum transparency for himself. For him, criticism of employees does not belong behind closed doors.
The most valuable chip company Nvidia is now worth more than two trillion dollars, making it the third most valuable company in the world. CEO Jensen Huang manages the US chip giant in a way that is anything but usual. “I have 60 employees who report directly to me,” said the co-founder, according to Handelsblatt, at a conference organized by the financial services provider Stripe in San Francisco. “This doesn’t correspond to common conventions, but it’s definitely the best way.”
Management theory calls for significantly fewer directly subordinate employees in order to manage them well, even if ideas about a sensible number differ. Huang’s calculation: “With a management team of 60 people who report directly to me, we can eliminate the need for up to seven hierarchical levels.” Nvidia, based in Silicon Valley, now has almost 30,000 employees.
In addition to flat hierarchies, Huang says he relies on maximum transparency. “There are no private conversations with me,” said the Nvidia boss, according to the report. “They’re nonsense.” When he has something to say, he always communicates openly – as well as in a weekly joint meeting with the 60 top managers who report to him.
Everyone should learn from colleagues’ disasters
“If I have something to say, everyone should hear it,” the “Handelsblatt” quoted Huang as saying. “There should be no privileged access to information.” No one should have a special position just because he or she is closer to the top management’s information. “Information is power, and when everyone has it, we are all more powerful.”
For the CEO, criticism doesn’t belong behind closed doors either: critical feedback brings more value when it’s shared publicly. “If someone messes up, everyone should have the chance to learn from that mistake.” It paralyzes learning progress to only focus on your own mistakes. “We learn from dealing with the disasters and tragedies of others.”
AI hype is causing demand to explode
However, Nvidia’s success may not be based primarily on Huang’s leadership style. The current hype surrounding artificial intelligence (AI) is causing the company to experience a boom in demand. Because programs like ChatGPT require a lot of computing power, customers are tearing the US semiconductor company’s products out of their hands. For example, the high-performance computer for ChatGPT is based on several thousand Nvidia processors. The disproportionately growing business with processors for data centers now contributes more than half of total sales.
The boom in cloud applications during the corona pandemic also played into Nvidia’s hands. In addition, so-called cryptocurrency miners use the chips to encrypt and verify transactions with Bitcoin & Co. But the popular hardware is not the only reason for Nvidia’s market dominance. The company has also built a software ecosystem designed to make it easier for developers to write applications for Nvidia processors.
According to experts, Nvidia controls 80 percent of the global market for graphics card chips. Competitors are AMD and Marvell. However, tech giants such as Amazon, Google and Meta are now working on their own special AI processors. Nvidia is currently the number three largest US technology company, after Microsoft and Apple. AMD and Intel together don’t even have a fifth of Nvidia’s stock market value.