The cautionary tale starts with the CEO, a former dishwasher at Denny’s who created one of the most consequential and valuable technologies in history, only to tarnish that legacy with a colossal failure of judgment that put his company, career, and possibly the security of both his countries at risk. (Huang is a dual citizen of Taiwan and the U.S.) It also includes board members who expressed “confidence in Jensen” when announcing their independent review. Add in the political leaders who’ve reportedly known about this potentially catastrophic conflict of interest for at least six months.

In any other period, at almost any other company, Huang would likely have been fired or put on leave for a lapse of this scale. Investors are no doubt furious as the stock dropped 4.3% yesterday and has lost more than a fifth of its value over the past month. The board is trying to find out the extent of the deceit. And tech CEOs may find Washington now demanding the kind of oversight that defense contractors take for granted. The lessons?

Beware the cult of personality. There’s much to admire about Jensen Huang, from his humble beginnings to his energetic keynotes, cool leather jacket and patina of common sense in a world where his peers can come off as a little odd. But focusing on a CEO’s personality can distract us from their actions. (Exhibit A: Elizabeth Holmes.) Huang’s so-called founder mode, with 60 direct reports and no 1:1 meetings, also creates a structure that makes him hard to replace. How do you develop a leadership bench when everyone reports to you? Nvidia is built around one man.

Beware the enamored board. Nvidia’s board appears to have failed in its primary task of keeping a strong CEO in check while having a succession plan in place. I was chatting with Yale’s Jeffrey Sonnenfeld yesterday, who described it as a “board imbued with idolatry” that appears to have no Plan B should Huang be judged unfit to lead. That’s not how this process is supposed to work. Done well, you get a board director like former Johnson & Johnson CEO Jim Burke, who, as an independent director at IBM, was key in replacing failing CEO John Akers with Lou Gerstner in 1993. Done badly, you get the debacle at HP, which in 2010 fired CEO Mark Hurd over a close personal relationship with a contractor—and falsified expense reports related to it—only to reach for outsider Leo Apotheker, who lasted less than a year.  

Beware unfettered AI leaders. Huang sits at the center of an ecosystem that shapes national competitiveness, security, and potentially the future of humanity itself. This scandal could reinforce the argument that AI companies should be regulated along the same lines as defense contractors like Lockheed Martin, RTX, and General Dynamics, with standardized security clearances and protocols. Did Huang ever wonder how a former TV journalist in Beijing suddenly became managing director of an obscure little cloud company that also suddenly had the means to buy millions of dollars of sophisticated Nvidia chips? Imagine the panic at learning the U.S. government knows you have a mistress and suspects she’s a spy for China’s Ministry of State Security. Did any government leaders feel an urgency to take action?

We don’t yet know how this ends for Huang. But the era of the unchecked CEO may be ending with him.

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

Top leadership news

Anthropic’s new Claude models undercut OpenAI on price

Anthropic launched two new AI models, Claude Fable 5.2 and Mythos 5.2, that cost 20% less to use than OpenAI’s GPT-6 Astra, with discounts of up to 80% when reusing previously processed information. The company says its models outperform rivals on coding benchmarks as it seeks to regain momentum after slower Q3 revenue growth.

Musk says many Cybertruck buyers will get deposits back

Elon Musk says Tesla will refund deposits to many customers awaiting Cybertrucks because orders far outstrip what it can build before the company ends Cybertruck production in eight months. He argues Cybercab output is worth more than the truck’s complexity. Loyal fans are pushing back, saying Tesla is abandoning car buyers to chase robotaxis. 

U.S. could reach debt ceiling sooner than expected

Bank of America now expects the U.S. to hit its $41.1 trillion debt ceiling as early as February, three months earlier than its previous forecast. The Treasury could use its cash reserves and other measures to avoid a default until November 2027, but analysts warned that the timing could put Congress in a difficult position as early as August.

The markets

S&P 500 futures are up 0.15% this morning. The last session closed up 2.35%. The STOXX Europe 600 was up 0.78% in early trading. The U.K.’s FTSE 100 was up 0.24% in early trading. Japan’s Nikkei 225 was up 2.87%. South Korea’s KOSPI was up 4.39%. China’s CSI 300 was up 0.07%. Hong Kong’s Hang Seng was up 0.44%. India’s markets are closed today. Bitcoin is down at $74k.

Around the watercooler

Bitcoin holds near $75,000 after tech stock rout, altcoins suffer steeper losses by Camila Grigera Naón

‘One of the highest-stress occupations’: Why $148,000 median pay can’t fix the air traffic controller shortage by Steven John

‘I’ll see you tomorrow’: What Michael Jordan’s trainer learned from the 1995 loss—and his three-tier test for winners by Heather Occhino

New York’s graying workforce: Residents over 65 are holding onto jobs longer and driving health care to become one of the ‘fastest-growing’ sectors by Emma Burleigh

CEO Daily is curated and edited by Joseph Abrams, Jason Ma, Claire Zillman, and Lee Clifford.