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Neal Stephenson
Source: Mercatus Center at George Mason University

Author Neal Stephenson shot to fame almost 30 years ago with the science-fiction novel “Snow Crash,” which envisioned a future dominated by mega-corporations and organized crime, competing for dominance in both the real world and the “metaverse,” a computer-generated world accessible through virtual reality headsets.

Since then, he’s written several more novels encompassing technology and history, including a trilogy set at the dawn of the scientific revolution, and has done work for various technology companies including Jeff Bezos’ space travel company, Blue Origin, and augmented reality company Magic Leap.

His new novel, “Termination Shock,” out Nov. 16, focuses on the looming issue of our age — human-generated climate change, projecting a near future of extreme weather and social chaos. Against this setting, a maverick oilman decides to take matters into his own hands and builds the world’s biggest gun to shoot canisters of sulfur dioxide into the air, echoing the effects of a volcanic eruption and temporarily cooling parts of the globe. Geopolitics, social media and Dutch royalty all play a part.

Stephenson acknowledges that geoengineering is a radical step, but suggests as the effects of climate change grow more destructive, the demand for radical solutions will grow.

But if geoengineering does happen, it probably won’t be because a billionaire took matters into their own hands.

“In real life, somebody like that would probably get shut down,” he told CNBC in an interview.

“By far, the more plausible scenario is that some government somewhere just makes the calculation at some point that doing this would be fairly cheap and easy. And better than not doing it, as far as [their] selfish purposes are concerned.”

Personally, he favors an all-of-the-above set of solutions to climate change, including more clean energy sources, decarbonizing the economy and carbon capture to take some of the CO2 we’ve emitted over the last 150 years out of the atmosphere. The trouble is convincing large numbers of people that this kind of action is necessary.

He points to two factors that he expects will convince more people that climate change can no longer be ignored. One is rising sea levels.

“You can be as ideological as you want. But you can’t argue with the fact that your house is full of water,” he says.

“And the other one is these possible so-called wet-bulb events, where some areas become so hot and humid that everyone who’s outdoors will just die.” Stephenson points to the “heat dome” that descended over the Pacific Northwest last summer, causing temperatures to skyrocket for a few days and killing hundreds of people.

He does not necessarily believe governments will come together and agree on solutions, although he says the recent 2021 United Nations Climate Change Conference, or COP 26, was a necessary and useful event. “We have to have those conferences. And we have to hope and pray that their strongest and most optimistic recommendations are put into effect.”

But even if they can’t agree, governments will be forced to respond.

“I think we’ll see the big governments, the Indias and Chinas of the world, charting their own path,” he says. “At the end of the day, most politicians want to retain their power. And they’re going to do what it takes to keep getting votes or to maintain their grip on on the political system. And if they’re seen as having presided over huge apocalyptic disasters and not taking effective action, then they’re in trouble.”

Although he was one of the first writers to popularize the idea of virtual reality, he does not necessarily believe that people will retreat into artificial worlds as the real world becomes harder to live in.

“I don’t hate VR,” he says. “But the reality has been so far that most people don’t like to hang out there for more than a short period of time. That may change as the technology gets better, but there’s just inherent limitations on things like the problem of getting motion sickness, the problem of how do you move around?”

He’s more bullish on augmented reality — the idea pioneered by Magic Leap and currently being developed by Microsoft, Apple, and others, where computer-generated images are blended with the real world. But he agrees it won’t take off until there’s a good reason for people to wear headsets or glasses for long periods of time. “It’ll probably have something to do with making it even smaller, more compact, and less of an intrusive experience to wear around.”

As far as the metaverse goes, Stephenson has stood back and watched as the tech and business worlds have claimed the term for themselves, most notably the company formerly known as Facebook, which renamed itself Meta to emphasize its interest in building a computer-generated universe.

“All I can do is kind of sit back and watch it in amazement,” he said. But, as many have noticed, “There’s a pretty big gap between what Facebook is actually doing, like running Facebook and WhatsApp and Instagram, and the visions that they’re talking about for the metaverse.”

Here’s a transcript of the complete interview, lightly edited for clarity and length.

Matt Rosoff, CNBC: The plot of your new novel “Termination Shock” is essentially about a maverick businessperson using geoengineering to reverse climate change. For CNBC readers who may not be familiar with the concept of geoengineering, can you tell us a little bit about it?

Neal Stephenson, author: The first point to emphasize is that it doesn’t fix the actual problem, which is too much carbon dioxide in the atmosphere. But it’s thought that it could be a stopgap way to slow down the rate at which the climate gets hotter.

And it’s basically imitating the effects of large volcanic eruptions by putting sulfur dioxide or something else into the atmosphere, right?

Exactly. There have been many cases throughout history where a big volcano — most recently, Pinatubo in the Philippines — does exactly this. And it puts particles or droplets of sulfates into the stratosphere, and those sort of act as a veil that bounces back a little bit of the sun’s radiation back into space so that it never reaches our planet and doesn’t warm us up. So we know that this cools the planet down because it’s happened a bunch of times throughout history. And we also know that the sulfates will kind of naturally wash out of the atmosphere in a couple of years. And you go back to where you were before.

The eruption of Mt. Pinatubo in the Philippines, 1991.
Thomson Reuters

So you almost need a constant infusion of them. While you decarbonize.

Exactly. The only sane way to use this, if it’s done at all, is as a way to buy time for decarbonization, which is what we really need to do.

How did you get interested in this subject and become fascinated with it enough to base a novel on it?

I’ve been hearing about the idea for a number of years. I’m interested in history. I’m interested in science and the physics of the planet. And so, the idea that a volcano could erupt somewhere and affect temperatures all over the planet is a natural, fascinating topic for me. Over the last decade or two, it’s become increasingly clear that the CO2 content in the atmosphere is a huge problem, and that it’s getting worse fast, and we’re not really being very effective. Despite efforts by a number of people to draw attention to the problem and and push for emissions reductions, that number is still climbing rather rapidly and probably will keep climbing for a while. So rolling that together in the brain of the science fiction novelist, that looks like the basis for a story that that’s got that technical angle to it, but that’s also got a strong geopolitical and personal storytelling basis.

Do you think it’s a realistic likelihood that this could happen in 10 to 15 years? Maybe a maverick individual, but more likely a government that doesn’t particularly care much about world opinion will take it into their own hands?

I agree. In this book, it’s the maverick billionaire because it makes for a good story. But I have to do a lot of explaining as to how he’s able to get away with it, because in real life, somebody like that would probably get shut down. By far, the more plausible scenario is that some government somewhere just makes the calculation at some point that doing this would be fairly cheap and easy. And better than not doing it as far as [their] selfish purposes are concerned.

It’s considered a pretty radical out-there idea. If you look at the overall landscape and what you’ve been seeing over the last few years, what do you think the likelihood of countries in industry and individuals voluntarily taking steps to reduce emissions enough to keep global warming to a minimum? Or how do you think it’s likely to play out over the next 10 to 15 years?

The number that matters is the CO2 in the atmosphere, which is above 400 parts per million and climbing, That’s higher than it’s been in millions of years. So when we talk about emissions reductions, all we’re saying is that the rate at which that number grows, will slow down. But it’s still growing, the numbers still get higher every year. It’s just not climbing as fast because we reduced our emissions. If we could get to zero emissions, which might happen in a few decades — like China’s saying maybe by 2060, it might get to zero emissions. That just means that that number stays wherever it is, for about a million years, which is how long it takes natural processes to remove it. So emissions reductions are great and zero emissions would be better than than not doing that, but still leaves us stuck with the number at a dangerously high level until we take active measures to remove that carbon dioxide from the atmosphere.

What do you think of carbon capture as a technology? Have you followed it at all?

I know an increasing number of people who are techies who are altering their careers to think about this and work on this. There’s a bunch of ways that it could be done. We have to do it. It will be the biggest engineering project by far in human history. We have to do it. We have to succeed. And it’ll take many decades.

Did you follow the COP26 conference at all? What did you think of it?

I followed it. Not super closely. But all of that stuff is great. We have to have those conferences. And we have to hope and pray that their strongest and most optimistic recommendations are put into effect. For sure. It’s just while we’re doing that, we can’t lose sight of what I said before, which is that reducing emissions or taking emissions to zero still doesn’t begin to solve the problem. It just means that we’re not making the problem worse.

What about other forms of energy? Nuclear energy in particular is one that draws a lot of interest from from readers. It’s zero carbon, but there’s fear about it, and some of that fear is grounded. What about that and other energy forms?

Nuclear, I think during the Cold War it kind of got rushed into service, too soon. And before the whole picture was was fully understood. So it’s not where where the engineering resources have been going in the last few decades. And with more resources, more engineers, more money, maybe we can find ways to do it that are that are safer. There are still intractable problems around what to do with nuclear waste, and and so on that need attention. But we’re entering into this phase in our history where we have to start thinking in terms of relative risks. If you’re talking about a particular new technology, they have to compare its risk to the risk of not using it.

There’s a lot going on that’s promising. Beyond just nuclear, there’s geothermal and the usual suspects, wind, solar, etc. And we need it all.

A lot of these discussions get bogged down by ideological purity tests. So one one side you’ve got activists who say if you even talk about adaptation, that’s wrong. Because you’re giving up on reduction. And if you even talk about carbon capture, you’re just giving the current economy and the current fossil fuel industry more more leeway to keep burning. Then you’ve got other people, the Bjorn Lomborgs of the world, who say, “Oh, we’re focusing way too much on the risks and not talking about the costs enough, and growth is the only way out.” How do you think about this? How do you parse this when you’re looking at all of these different, really strong ideological beliefs?

Yeah, a whole separate dimension to the problem that we’re facing is weird, weird polarization of everything. It’s incredibly obstructive. There was just an article in The New York Times about Republicans who are furious at other Republicans who voted for the infrastructure bill. Like, how dare you vote for bridges?

It’s really disheartening and seems like it’s definitely this partisan shift by bad actors who think they’re gaining something from it.

I personally can look at something like carbon capture, and I can make an argument that convinces me that we should be doing it, so it’s not hard for me to formulate my own opinion on that. Much harder is getting millions and millions of other people to agree.

What do you think will be the tipping point? I’ve noticed a lot more people coming around to the idea that we need a multifaceted, throw-everything-at-it solution. And I think some of that comes as the effects become harder and harder to ignore, so it’s harder to presume that this is just happening somewhere else. Do you imagine some kind of event, or series of events, that can break this logjam?

So here’s an example. We had this heat dome event in Seattle over the summer, where out of nowhere, from a normal summer’s day, just suddenly, it was 115 degrees. Much hotter than it has ever been in Seattle.

I grew up there, and lived there for 10 years as an adult as well. So yeah, that was staggering.

So that happened overnight, and after three days of that, overnight, the temperature dropped by 50 degrees. A bunch of people died. So I think an event like that might convince a bunch of people who live in Seattle.

But I think one is going to be rising sea levels, which is something you can’t argue with. You can be as ideological as you want. But you can’t argue with the fact that your house is full of water.

And the other one is these possible so-called wet-bulb events, where some areas become so hot and humid that everyone who’s outdoors will just die.

How can people come together to ensure that solutions help the broadest number of people, rather than pulling up the drawbridges — let’s just escape into space or our compound in New Zealand or something like that? Or do you think it’s inevitable that the people with the means are going to run?

Of course, some people are going to do that. And other parts of the world are going to be depopulated one way or the other. But I think we’ll see the big governments, the Indias and Chinas of the world, charting their own path, going their own way, doing what they think they need to do, in order to basically prevent their their governments from falling. At the end of the day, most politicians want to retain their power. And they’re going to do what it takes to keep getting votes or to maintain their grip on on the political system. And if they’re seen as having presided over huge apocalyptic disasters and not taking effective action, then they’re in trouble.

I have to ask about the metaverse, a term that you coined in the book “Snow Crash” in 1992. Now it’s everywhere in tech. It was on Disney‘s earnings call! Everybody in the tech world is suddenly using the term, probably not the way you intended it or originally envisioned it. What are your thoughts on that?

I have to assume that some of this is pre-emptive. Making sure that one company — that Facebook — doesn’t establish a trademarkable position. If they begin to throw the term around, and nobody else does, then they might be able to later prevent other people from from using the term. So that might be part of why they’re doing this.

I don’t know. All I can do is kind of sit back and watch it in amazement.

There’s a pretty big gap between what Facebook is actually doing, like running Facebook and WhatsApp and Instagram, and the visions that they’re talking about for the metaverse. They’re two very different things. That’s important to keep in mind.

I had a conversation with a VC maybe six or seven years ago, and he was sort of a pessimist in general about the course of humanity and where things are going. He said, “Hey, you know, if you’re a pessimist, VR seems like a great bet. Because everybody’s going to want to escape from their real world conditions.” Do you see things that way at all?

I’m personally more interested in AR than in VR. I mean, I don’t hate VR. But the reality has been so far that most people don’t like to hang out there for more than a short period of time. That may change as the technology gets better, but there’s just inherent limitations on things like the problem of getting motion sickness, the problem of how do you move around? I mean, while I’m talking to you, I’m just kind of wandering around my house. And that’s a normal human thing to do, to want to get up and move around. That’s a difficult thing to do in a VR environment because you’ll step on your cat.

I know you were involved with Magic Leap, and that seems to have gone in a different direction with Peggy Johnson in charge, focusing on enterprise a lot, like Microsoft has, but what’s it going to take for for AR to really take off? What are the technological barriers? I look at how mobile was with Windows Mobile and Palm and some of those things, and then all of a sudden, the iPhone had enough new things in it, the capacitive touch screen and the idea of apps, that it was 18 months ahead of everybody else. And that was enough for it to take off. Is there something like that, that would have to happen for AR to take off?

I think that’s a good analogy. Somewhere out there is that tipping point. And nobody knows where it is until they’ve found it. And so timing is tricky. I think what Magic Leap accomplished in the way of hardware is impressive. I mean, they’re shipping a headset with a 6D controller and a whole system that tracks the room around you. And it makes it possible for applications to interact with things that it sees in your environment. And there’s a lot of engineering that has to happen to make those things all work together in a package that doesn’t immediately catch on fire or run out of batteries.

I actually saw [former Oculus CTO John] Carmack tweeted, not about Magic Leap, but he was saying maybe what VR headsets need is a big heat exchanger that would sit on top of your head.

So engineering-wise, I think it’s been going pretty well. The question is what will prompt people to want to wear something like this all day long and make it just a routine thing to carry around. And it’ll probably have something to do with making it even smaller, more compact, and less of an intrusive experience to wear around.

You’ve been writing about technology for about three decades now. When you look back at when you started this, when the internet was young, what has surprised you and what do you think you’ve been right about? What did you anticipate, and what did you not anticipate?

The popularity early on of relatively simple forms of the internet, just simple web browsers with words and pictures, and how catchy that was, how rapidly people adopted it. That was a surprise to me because as a techie, I wanted to have more splashy kinds of technologies like full 3D immersive experiences. Who knew that reading a few words on a webpage and maybe seeing a grainy JPEG would be so transformative?

On the not-so-happy side, the speed with which and the completeness with which it was taken over by bad actors. I remember when Obama was elected. People were saying, ‘Well, you know, Obama’s team, they understood the internet, they understood how to use the internet. And Republicans, they’re old. And they don’t get it. So they’ve been left in the dust.’ And then eight years later, not only did they get it, but they got way in a way deeper, and much more kind of cynical way than the Democrats had.

I know that there’s an HBO adaptation of “Snow Crash” in the works, maybe coming out this year. I haven’t heard much about it recently, can you talk about that?

The reason you haven’t heard about it is because they passed on it in June. So it’s no longer an HBO Max project. It’s reverted to Paramount. And Kennedy/Marshall.

Are we going to see it soon?

All I can say is stay tuned. A lot of people want it to happen.

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European SpaceX rival raises $160 million for reusable capsule to carry astronauts, cargo to space

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European SpaceX rival raises 0 million for reusable capsule to carry astronauts, cargo to space

The Space Exploration develops a product called Nyx, a reusable capsule that can be launched from rockets into space carrying passengers and cargo.

The Exploration Company (TEC) announced Monday it has raised $160 million to fuel development of its capsule that is designed to take astronauts and cargo to space stations.

Venture capital firms Balderton Capital and Plural were the lead investors in the round which also included French government-backed investment vehicle French Tech Souveraineté and German government-backed fund DeepTech & Climate Fonds.

TEC’s core product is Nyx, a capsule that can be launched from rockets into space carrying passengers and cargo. Nyx is reusable so once it has dropped its payload, it can re-enter the Earth’s atmosphere and be used for the next mission.

“It’s a big market, and it’s growing about a bit more than 10% per year because more nations want to fly their astronauts and more nations want to go to the moon,” Hélène Huby, founder and CEO of TEC, told CNBC in an interview.

“So there is an increased demand for sending people to stations, sending cargo to stations,” she said.

This part of the market has very few players. Some of the biggest are SpaceX which has a capsule called Dragon. There are also rivals from China and Russia.

“We said, ‘okay, let’s build this capacity in Europe so that Europe can have its own capsule and also the world needs an alternative solution. [We] cannot only bet on SpaceX,” Huby said.

TEC is currently developing the second version of Nyx which it expects to launch next year, followed by a final version in 2028. This model will be partly financed by the European Space Agency.

Huby said the company has signed $800 million in contracts to use its capsule. These include mission contracts with companies including Starlab, which is designing a new space station, and Axiom Space.

There is increasing activity in space among nations including China, the U.S. and India. One of the most ambitious projects is the NASA-led Gateway, which will be the first space station to orbit the moon.

“If you have more people, you also have a need for more cargo. So this is what is happening around the Earth and around the moon,” Huby said.

Huby sees TEC being a key player when it comes to developing the technology that is needed to return cargo to Earth once it has been in space.

“This is also where we where we believe our vehicle is going to play an important role,” Huby said.

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Palantir jumps 9% to a record after announcing move to Nasdaq

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Palantir jumps 9% to a record after announcing move to Nasdaq

Alex Karp, CEO of Palantir Technologies speaks during the Digital X event on September 07, 2021 in Cologne, Germany. 

Andreas Rentz | Getty Images

Palantir shares continued their torrid run on Friday, soaring as much as 9% to a record, after the developer of software for the military announced plans to transfer its listing to the Nasdaq from the New York Stock Exchange.

The stock jumped past $64.50 in afternoon trading, lifting the company’s market cap to $147 billion. The shares are now up more than 50% since Palantir’s better-than-expected earnings report last week and have almost quadrupled in value this year.

Palantir said late Thursday that it expects to begin trading on the Nasdaq on Nov. 26, under its existing ticker symbol “PLTR.” While changing listing sites does nothing to alter a company’s fundamentals, board member Alexander Moore, a partner at venture firm 8VC, suggested in a post on X that the move could be a win for retail investors because “it will force” billions of dollars in purchases by exchange-traded funds.

“Everything we do is to reward and support our retail diamondhands following,” Moore wrote, referring to a term popularized in the crypto community for long-term believers.

Moore appears to have subsequently deleted his X account. His firm, 8VC, didn’t immediately respond to a request for comment.

Last Monday after market close, Palantir reported third-quarter earnings and revenue that topped estimates and issued a fourth-quarter forecast that was also ahead of Wall Street’s expectations. CEO Alex Karp wrote in the earnings release that the company “absolutely eviscerated this quarter,” driven by demand for artificial intelligence technologies.

U.S. government revenue increased 40% from a year earlier to $320 million, while U.S. commercial revenue rose 54% to $179 million. On the earnings call, the company highlighted a five-year contract to expand its Maven technology across the U.S. military. Palantir established Maven in 2017 to provide AI tools to the Department of Defense.

The post-earnings rally coincides with the period following last week’s presidential election. Palantir is seen as a potential beneficiary given the company’s ties to the Trump camp. Co-founder and Chairman Peter Thiel was a major booster of Donald Trump’s first victorious campaign, though he had a public falling out with Trump in the ensuing years.

When asked in June about his position on the 2024 election, Thiel said, “If you hold a gun to my head I’ll vote for Trump.”

Thiel’s Palantir holdings have increased in value by about $3.2 billion since the earnings report and $2 billion since the election.

In September, S&P Global announced Palantir would join the S&P 500 stock index.

Analysts at Argus Research say the rally has pushed the stock too high given the current financials and growth projections. The analysts still have a long-term buy rating on the stock and said in a report last week that the company had a “stellar” quarter, but they downgraded their 12-month recommendation to a hold.

The stock “may be getting ahead of what the company fundamentals can support,” the analysts wrote.

WATCH: Palantir hits record as defense adopts AI tech

Palantir hits record high as defense adopts AI tech

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Super Micro faces deadline to keep Nasdaq listing after 85% plunge in stock

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Super Micro faces deadline to keep Nasdaq listing after 85% plunge in stock

Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7. 

Annabelle Chih | Bloomberg | Getty Images

Super Micro Computer could be headed down a path to getting kicked off the Nasdaq as soon as Monday.

That’s the potential fate for the server company if it fails to file a viable plan for becoming compliant with Nasdaq regulations. Super Micro is late in filing its 2024 year-end report with the SEC, and has yet to replace its accounting firm. Many investors were expecting clarity from Super Micro when the company reported preliminary quarterly results last week. But they didn’t get it.

The primary component of that plan is how and when Super Micro will file its 2024 year-end report with the Securities and Exchange Commission, and why it was late. That report is something many expected would be filed alongside the company’s June fourth-quarter earnings but was not.  

The Nasdaq delisting process represents a crossroads for Super Micro, which has been one of the primary beneficiaries of the artificial intelligence boom due to its longstanding relationship with Nvidia and surging demand for the chipmaker’s graphics processing units. 

The one-time AI darling is reeling after a stretch of bad news. After Super Micro failed to file its annual report over the summer, activist short seller Hindenburg Research targeted the company in August, alleging accounting fraud and export control issues. The company’s auditor, Ernst & Young, stepped down in October, and Super Micro said last week that it was still trying to find a new one.

The stock is getting hammered. After the shares soared more than 14-fold from the end of 2022 to their peak in March of this year, they’ve since plummeted by 85%. Super Micro’s stock is now equal to where it was trading in May 2022, after falling another 11% on Thursday.

Getting delisted from the Nasdaq could be next if Super Micro doesn’t file a compliance plan by the Monday deadline or if the exchange rejects the company’s submission. Super Micro could also get an extension from the Nasdaq, giving it months to come into compliance. The company said Thursday that it would provide a plan to the Nasdaq in time. 

A spokesperson told CNBC the company “intends to take all necessary steps to achieve compliance with the Nasdaq continued listing requirements as soon as possible.”

While the delisting issue mainly affects the stock, it could also hurt Super Micro’s reputation and standing with its customers, who may prefer to simply avoid the drama and buy AI servers from rivals such as Dell or HPE.

“Given that Super Micro’s accounting concerns have become more acute since Super Micro’s quarter ended, its weakness could ultimately benefit Dell more in the coming quarter,” Bernstein analyst Toni Sacconaghi wrote in a note this week.

A representative for the Nasdaq said the exchange doesn’t comment on the delisting process for individual companies, but the rules suggest the process could take about a year before a final decision.

A plan of compliance

The Nasdaq warned Super Micro on Sept. 17 that it was at risk of being delisted. That gave the company 60 days to submit a plan of compliance to the exchange, and because the deadline falls on a Sunday, the effective date for the submission is Monday.

If Super Micro’s plan is acceptable to Nasdaq staff, the company is eligible for an extension of up to 180 days to file its year-end report. The Nasdaq wants to see if Super Micro’s board of directors has investigated the company’s accounting problem, what the exact reason for the late filing was and a timeline of actions taken by the board.

The Nasdaq says it looks at several factors when evaluating a plan of compliance, including the reasons for the late filing, upcoming corporate events, the overall financial status of the company and the likelihood of a company filing an audited report within 180 days. The review can also look at information provided by outside auditors, the SEC or other regulators.

Lightning Round: Super Micro is still a sell due to accounting irregularities

Last week, Super Micro said it was doing everything it could to remain listed on the Nasdaq, and said a special committee of its board had investigated and found no wrongdoing. Super Micro CEO Charles Liang said the company would receive the board committee’s report as soon as last week. A company spokesperson didn’t respond when asked by CNBC if that report had been received.

If the Nasdaq rejects Super Micro’s compliance plan, the company can request a hearing from the exchange’s Hearings Panel to review the decision. Super Micro won’t be immediately kicked off the exchange – the hearing panel request starts a 15-day stay for delisting, and the panel can decide to extend the deadline for up to 180 days.

If the panel rejects that request or if Super Micro gets an extension and fails to file the updated financials, the company can still appeal the decision to another Nasdaq body called the Listing Council, which can grant an exception.

Ultimately, the Nasdaq says the extensions have a limit: 360 days from when the company’s first late filing was due.

A poor track record

There’s one factor at play that could hurt Super Micro’s chances of an extension. The exchange considers whether the company has any history of being out of compliance with SEC regulations.

Between 2015 and 2017, Super Micro misstated financials and published key filings late, according to the SEC. It was delisted from the Nasdaq in 2017 and was relisted two years later.

Super Micro “might have a more difficult time obtaining extensions as the Nasdaq’s literature indicates it will in part ‘consider the company’s specific circumstances, including the company’s past compliance history’ when determining whether an extension is warranted,” Wedbush analyst Matt Bryson wrote in a note earlier this month. He has a neutral rating on the stock.

History also reveals just how long the delisting process can take. 

Charles Liang, chief executive officer of Super Micro Computer Inc., right, and Jensen Huang, co-founder and chief executive officer of Nvidia Corp., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. 

Annabelle Chih | Bloomberg | Getty Images

Super Micro missed an annual report filing deadline in June 2017, got an extension to December and finally got a hearing in May 2018, which gave it another extension to August of that year. It was only when it missed that deadline that the stock was delisted.

In the short term, the bigger worry for Super Micro is whether customers and suppliers start to bail.

Aside from the compliance problems, Super Micro is a fast-growing company making one of the most in-demand products in the technology industry. Sales more than doubled last year to nearly $15 billion, according to unaudited financial reports, and the company has ample cash on its balance sheet, analysts say. Wall Street is expecting even more growth to about $25 billion in sales in its fiscal 2025, according to FactSet.

Super Micro said last week that the filing delay has “had a bit of an impact to orders.” In its unaudited September quarter results reported last week, the company showed growth that was slower than Wall Street expected. It also provided light guidance.

The company said one reason for its weak results was that it hadn’t yet obtained enough supply of Nvidia’s next-generation chip, called Blackwell, raising questions about Super Micro’s relationship with its most important supplier.

“We don’t believe that Super Micro’s issues are a big deal for Nvidia, although it could move some sales around in the near term from one quarter to the next as customers direct orders toward Dell and others,” wrote Melius Research analyst Ben Reitzes in a note this week.

Super Micro’s head of corporate development, Michael Staiger, told investors on a call last week that “we’ve spoken to Nvidia and they’ve confirmed they’ve made no changes to allocations. We maintain a strong relationship with them.”

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