Jensen Huang's Unusual Nvidia Management Style Doesn't Include Long-Term Plans or Reports

Jensen Huang enjoying a night market
(Image credit: CW Lin)

Nvidia this year became the world's most valuable semiconductor company with a value of over $1 trillion. The company earns more money than Intel and other tech giants, and yet Jensen Huang's management style is quite unconventional, as it turns out, with no long-term planning and 40 direct reports, among other interesting tidbits. Nvidia CEO Jensen Huang outlined his management philosophy in an interview with Joel Hellermark conducted earlier this year (and recently noticed by analyst Dan Hockenmaier), giving a unique insight into the radically different way that Huang manages his company.  

40 Direct Reports, No 1:1 Meetings

Huang avoids typical hierarchical communication and maintains a flat organizational structure, with as many as 40 direct reports. Meanwhile, he avoids 1:1 meetings, preferring group discussions that ensure everyone is on the same level, starting right from the top. Huang places a strong emphasis on continuous learning and staying updated with the latest trends and innovations in the industry. One of the ways he does this is by surrounding himself with knowledgeable individuals who are willing to share their expertise.

Meetings at Nvidia are not restricted by rank or position. Everyone, from VPs to entry-level employees, has access to all information and can join any meeting, according to Huang. Huang's philosophy revolves around the idea that if there's a strategic direction or decision to be made, why limit the information to a select few?  

"If there is a strategic direction, why do you tell one person," Huang asked rhetorically. "You tell everybody, and so after, we are swimming in the soup of strategizing and how to formulate the path to the future. When the time comes, I will send it out to everybody at the same time, or I will tell everybody at the same time, and people will give me feedback, and we will refine it."

Share Strategic Directions, No Solid Plans

By sharing the strategic direction of the company with everyone, Huang says he opens the door for feedback from various perspectives. This collective approach is designed to harness the intelligence and expertise of the entire organization, leading to refined and well-thought-out strategies.

When it comes to strategies, Nvidia certainly follows its own path. In terms of planning, Huang believes that rigid long-term plans can sometimes be restrictive. Therefore, he doesn't set long-term or short-term plans. Instead, the company adopts a flexible approach, constantly re-evaluating its strategies based on the ever-evolving business and market conditions, according to Huang. This is particularly crucial given the rapid advancements in the field of AI, where adaptability can be a significant advantage.

"We don't do a periodic planning system," said Huang. "The reason for that is because the world is a living, breathing thing. So, we just plan continuously; there is no five-year plan, there is no one-year plan, there is no plan — there is just what we are doing."

To speed up the decision-making process and stay up-to-date with realities, Huang gave up usual status reports. He feels that by the time status updates reach him, they often lose their "ground truth" (original essence and authenticity). To counteract this, he encourages any employee to email him their immediate 'top five things' on their mind. Every morning, he dedicates time to reading around 100 of these emails, ensuring he is in touch with the ground realities of his company.

Think Outside the Box, Leave Commodity Markets

Huang says the core mission of Nvidia is to tackle challenges that are on the edge of what's currently possible, pushing the envelope of what conventional computers can achieve rather than solving regular computing problems. In fact, Huang believes in walking away from businesses or sectors that have become commoditized, which is why Nvidia left the smartphone and tablet SoC market a few years ago. Huang feels this approach drives technological advancements and sets Nvidia apart from rivals. 

However, making decisions that deviate from the norm or established playbooks can be challenging. Instead of following established practices, Huang suggests breaking down problems into their fundamental truths and building solutions from there, saying this approach encourages innovative thinking and often leads to groundbreaking solutions that traditional methods might overlook. Another way Huang says he deviates from established practices is by trusting his intuition to 'make the right decisions at the right time.'

Huang describes Nvidia's organizational structure as having three primary objectives: attracting the best talent in the industry, operating with a lean and efficient team, and ensuring that information flows swiftly and effectively throughout the company.

The merits of different management styles often come with many tradeoffs, and we don't get to see that side of the picture in the one-sided description. However, it is clear that Huang's unique style is designed to retain much of the flexibility you would see with a start-up, as opposed to the rigid hierarchical organizations at large incumbents that often become mired down in internal bureaucracy and then begin to stagnate. Nvidia is experiencing rapid growth now as it has essentially cornered many aspects of the explosive GPU market, but how this streamlined management style will work as the company becomes larger remains a question, along with whether or not a successor could succeed in replicating the approach.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • bit_user
    Always be wary of over-interpreting N=1 case studies. You can't tell if they succeeded because of what's being highlighted, or in spite of it. Nor, how certain things they did were counterbalanced or facilitated by other things.

    Interviews are particularly fraught, due to a natural tendency towards self-serving narrative:
    "Huang believes in walking away from businesses or sectors that have become commoditized, which is why Nvidia left the smartphone and tablet SoC market a few years ago."Or, perhaps because they just didn't do a very good job of competing, there. Their first 5+ years of trying to play in that market were a comedy of errors, during which many bridges were burnt. Towards the end, they sunk way too many resources in designing their own CPU cores, which I'm not sure ever delivered competitive performance. The only thing they really had going for them were their iGPUs.

    However, based on some things they said around the time of their Maxwell and Pascal launches, it sounds as though their foray into mobile was very healthy for their dGPU business, since it really forced them to focus on energy efficiency in a way they hadn't previously done. That, in turn, enabled them to perform much better at scale, because they weren't as power- or thermally-limited. It might've even been behind their transition to tiled-rendering. Their SoC business also set the stage for their move into robotics and self-driving.

    Something else that irked me:
    "Another Huang deviates from established practices is by trusting intuition"
    Yeah, just ask their chip designers how much they rely on intuition. I don't buy it. I don't know how much of this is misdirection vs. Huang actually not knowing how their architects and design engineers do their jobs, but I can pretty much guarantee you they model everything and rely on data for the multitude of their decisions.

    What I'd say stands out for me is their ability to learn and adapt. That, and the foresight behind pushing CUDA into educational institutions and investing big in AI were the real reasons for their current success. Not the management style, IMO.
    Reply
  • Kamen Rider Blade
    bit_user said:
    Always be wary of over-interpreting N=1 case studies. You can't tell if they succeeded because of what's being highlighted, or in spite of it. Nor, how certain things they did were counterbalanced or facilitated by other things.
    In this N=1 case study, nVIDIA, for better or worse, is the leader of the GPU / AI market

    bit_user said:
    Or, perhaps because they just didn't do a very good job of competing, there. Their first 5+ years of trying to play in that market were a comedy of errors, during which many bridges were burnt. Towards the end, they sunk way too many resources in designing their own CPU cores, which I'm not sure ever delivered competitive performance. The only thing they really had going for them were their iGPUs.
    The many bridges burnt has been a consistent thing with nVIDIA. Many companies and people within the Tech industry aren't fond of nVIDIA's behavior. The console market has a tendency to reflect this. Many companies are (One and Done) when dealing with nVIDIA.

    - After Bump-Gate, Apple refuses to do business with nVIDIA.
    - Sony did business with nVIDIA after their own internal GPU's failed and they needed one, so nVIDIA helped them out on the PS3, after that, Sony never went back.
    - MS did business with nVIDIA on the original Xbox, after that, they were swapping to AMD afterwards with only 1x dabble in POWER for the CPU, and the rest using x86 from AMD afterwards.
    - Nintendo is on it's current phase with nVIDIA, we'll see how long that relationship lasts.

    bit_user said:
    Yeah, just ask their chip designers how much they rely on intuition. I don't buy it. I don't know how much of this is misdirection vs. Huang actually not knowing how their architects and design engineers do their jobs, but I can pretty much guarantee you they model everything and rely on data for the multitude of their decisions.
    I don't expect Jensen Huang himself to know all the details that his numerous engineers are doing. He has to trust his employees to some degree and trust that they're using good data for their decision making.

    bit_user said:
    What I'd say stands out for me is their ability to learn and adapt. That, and the foresight behind pushing CUDA into educational institutions and investing big in AI were the real reasons for their current success. Not the management style, IMO.
    Actually, his management style resembles the OODA Loop IMO.
    Whether or not he got it from John Boyd or came to it on his own is unknown.

    Jensen Huang has stated in his interview that "He wanted a company that was smaller, not larger; you want a company as small as possible; not as large as possible; it needs to be as large as necessary to do the job well; but to be as small as possible"
    That's ALOT of head-count for nVIDIA just for Graphics & AI
    Reply
  • bit_user
    Kamen Rider Blade said:
    Head Count at the Big 3 Tech Companies (Intel, AMD, nVIDIA):
    That's ALOT of head-count for nVIDIA just for Graphics & AI
    Don't forget that they bought a large player in datacenter networking and they build their own DGX systems. I'm sure a chunk of those people also work in robotics & self-driving.
    Reply
  • Kamen Rider Blade
    bit_user said:
    Don't forget that they bought a large player in datacenter networking and they build their own DGX systems. I'm sure a chunk of those people also work in robotics & self-driving.
    But all those other divisions are small potatoes compared to their core 2-businesses.

    DataCenter & Gaming.

    Everything else falls by the wayside in comparison to the big 2 drivers.
    Reply
  • bit_user
    Kamen Rider Blade said:
    But all those other divisions are small potatoes compared to their core 2-businesses.

    DataCenter & Gaming.

    Everything else falls by the wayside in comparison to the big 2 drivers.
    The core AI investment feeds all 3 businesses, really. The way people might be spread across the organization probably better reflects the future value of those businesses, more than the current revenue.
    Reply
  • Kamen Rider Blade
    From the Jensen Huang Interview:
    Jensen Huang:
    We never talk about marketshare in our company, and the reason for that is because:
    why are you talking about I have 23% of MarketShare, and they have 27% MarketShare.
    Why are you fighting people for MarketShare?
    Because the whole concept of MarketShare says that there is a whole bunch of other people who are doing the same thing.
    If they are doing the same thing, why are we doing it?
    Why am I squandering the lives of these incredibly talented people to go do something that has been done.
    Unless we enjoy the competition, which I tend not to.
    So we tend not to go fight people for marketshare, fight people over markets that are comoditized.

    Talk about speaking from a privileged position where you are the #1 player in the GPU market for gaming and DataCenter.

    If his company wasn't in that position, and actually had to compete, he'd probably have a very different tone/attitude about it.

    Not surprising that he doesn't like competition, he's been sitting on the top of the mountain for too long.

    bit_user said:
    The core AI investment feeds all 3 businesses, really. The way people might be spread across the organization probably better reflects the future value of those businesses, more than the current revenue.
    Given how Jensen has stated that he doesn't want to do "Commoditized Work" and is willing to leave sectors of business if it becomes "Too Commoditized", I wonder how much attachment he has to each of those other sectors.

    There are plenty of people/competitors in:
    - DataCenter & Networking
    - Robotics
    - Self Driving.

    Jensen himself stated that he's more than happy to abandon those industries if there are too many players in there and they're doing "Commoditized Work".

    So if AI becomes to "Commoditized", what will he do?

    It's not like there are shortages of AI companies right now, there are literally hundreds around the world.

    Plenty with their own silicon & software stack.
    Reply
  • bit_user
    Kamen Rider Blade said:
    Given how Jensen has stated that he doesn't want to do "Commoditized Work" and is willing to leave sectors of business if it becomes "Too Commoditized", I wonder how much attachment he has to each of those other sectors.

    There are plenty of people/competitors in:
    - DataCenter & Networking
    - Robotics
    - Self Driving.
    Those really don't fit the definition of commodities. A commodity isn't defined by how many people are competing in the market, but rather by being something where you're basically reduced to competing on price, because the products are otherwise so indistinguishable and interchangeable. That means opportunities to add value are also extremely limited. I get why he doesn't want to be in a low-margin business with few opportunities for differentiation. Totally makes sense.
    Nouncommodity (countable and uncountable, plural commodities)

    ...
    ...
    ...
    (marketing) Undifferentiated goods characterized by a low profit margin, as distinguished from branded products.
    Although they were once in the forefront of consumer electronics, the calculators have become a mere commodity....Source: https://en.wiktionary.org/wiki/commodity
    Kamen Rider Blade said:
    So if AI becomes to "Commoditized", what will he do?
    If the hardware gets commoditized (which doesn't seem likely to happen any time soon), I guess they'd just follow the value chain. They're investing quite a lot in the AI application domain, like self-driving and robotics, but also lots of other things.

    Kamen Rider Blade said:
    It's not like there are shortages of AI companies right now, there are literally hundreds around the world.
    Making hardware? None at Nvidia's level. Some are successful in their own niche, but most are just wannabees. The AI hardware industry will likely consolidate a lot, over the next couple years. Investors don't have unlimited patience, and if you can't make a go of it in the current climate, then there's probably not much hope for you.
    Reply
  • -Fran-
    Man... I just wanted to know where he buys his leather jackets.

    Regards.
    Reply
  • Argolith
    Well, I could have told you they are incredibly shortsighted and run towards the next moneymaker without too much care about what used to be their core business.
    Just look at the gaming GPU market, where the only "sensible" purchases nowadays are in the "I don't know where the money I spend comes from" price range.
    Reply
  • Keng Yuan
    I think Elon Musk is pretty much the same, maybe he took a page or two from Huang, or maybe it's just how modern management should be
    Reply