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The following is excerpted from the book “The Nvidia Way: Jensen Huang and the Making of a Tech Giant,” written by Tae Kim, a senior technology writer at Barron’s, and publishing Dec. 10 by W.W. Norton & Company. The excerpt is from a chapter about activist hedge fund Starboard Value, founded by Jeff Smith.

Early in 2013, Nvidia’s shareholders were getting restless. The stock price had been roughly flat for four years, and the financial performance was mixed. In its latest quarter ending in January, sales were up 7 percent year-­over-­year, but earnings were down 2 percent.

Nvidia had a strong balance sheet of about $3 billion in net cash, which was a significant asset when the overall market value of the company was $8 billion total. However, its growth rate was only in the single digits, which resulted in a price-­to-­earnings (P/E) multiple of just 14 times earnings. After backing out Nvidia’s cash on hand, Starboard believed that the company was severely undervalued, and its core assets had far more room to grow. The fund pounced: according to Securities and Exchange Commission 13F filings, the hedge fund accumulated a stake of 4.4 million shares in Nvidia, worth about $62 million, during the quarter ending in June of 2013.

Some executives at Nvidia weren’t excited about having Starboard as an investor. One senior Nvidia executive said the company’s board was very worried that the activist fund would force a reorganization of the company, install its own board, and make Nvidia cut back on its investments in CUDA—­the kind of drastic reshaping that it would attempt with Darden the following year. Another Nvidia executive said Starboard wanted a board seat, but the board had pushed back.

Still, the relationship never became too antagonistic. “I don’t think it ever got to what I would call a crisis stage. You know DEFCON 1?” one Nvidia executive said, referring to the alert system used by the U.S. military for nuclear war. DEFCON 5 indicates peace, while DEFCON 1 means nuclear war is imminent. “It got to DEFCON 3.”

The Starboard team met several times with Jensen and other Nvidia leaders to discuss strategy. Looking back on the investment years later, Smith said that Starboard primarily advocated for an aggressive stock buyback program and a de-­emphasis on non-­GPU projects such as phone processors. Starboard refrained from applying additional pressure after the meetings. The hedge fund eventually got its wish on the buybacks. In November 2013, Nvidia made two announcements: a commitment to buy back $1 billion of stock by fiscal 2015 and the authorization of an additional $1 billion stock buyback. The stock price rallied about 20 percent in the ensuing few months, and Starboard sold its position in Nvidia by March the following year.

Far from a contentious relationship, Nvidia and Starboard seemed to work well together in this brief period.

“We were incredibly impressed with Jensen,” said Smith.

For his part, Jensen recalls the meetings with Starboard but doesn’t particularly remember what was discussed. Before he knew it, Starboard was no longer an investor. But that wasn’t the end of Starboard’s influence on the chip industry, and on Nvidia.

A company called Mellanox was founded in 1999 by several Israeli technology executives, led by Eyal Waldman, who became its CEO. Mellanox provided high-­speed networking products for data centers and supercomputers under the “InfiniBand” standard and soon became an industry leader. It had impressive revenue growth, going from $500 million in 2012 to $858 million in 2016. However, its high research and development spend left it with very thin profit margins.

In January 2017, Starboard bought an 11 percent stake in Mellanox. It sent a letter criticizing Waldman and his team for their disappointing performance over the prior five years. Mellanox’s share price had fallen even though the semiconductor industry index had risen in value by 470 percent. Its operating margins were half of the average of its peer companies. “Mellanox has been one of the worst performing semiconductor companies for an extended period of time,” read Starboard’s letter. “The time for fringe changes and marginal improvements has long passed.”

After a long series of discussions with the board, Starboard and Mellanox reached a compromise in June 2018. Mellanox would appoint three Starboard-­approved members to its board and give the hedge fund additional future rights if Mellanox didn’t meet certain undisclosed financial targets. Even with those concessions in hand, Starboard retained the option of waging a proxy fight to replace Waldman. Alternatively, Mellanox could choose to sell itself to a company that could generate better returns on its assets than it could as an independent company. The groundwork was laid for what would be one of the most consequential transactions in the history of the chip industry.

In September 2018, Mellanox received a nonbinding purchase offer from an outside company at $102 per share—­a premium of almost a third over its current stock price of $76.90. Mellanox was now fully in play. It solicited an investment bank to seek other bidders and eventually expanded its list of potential buyers to seven in total.

Jensen wasn’t thinking about acquiring Mellanox when it became available, according to another Nvidia executive. But he quickly saw the strategic importance of the asset, decided Nvidia had to win the auction, and joined the hunt in October.

Eventually, the list was narrowed down to three serious bidders: Nvidia, Intel, and Xilinx, which made chips primarily for industrial uses. The three potential buyers got into a multi-­month bidding war, with Intel and Xilinx topping out around a bid of $122.50 a share. Nvidia went just a little bit higher, at $125 per share. It won the bidding war on March 7, 2019, for an all-­cash offer of $6.9 billion.

Days later, Nvidia and Mellanox made the deal public and held a conference call with analysts and investors.

“Let me tell you why this makes sense for Nvidia and why I’m excited about it,” Jensen said. He talked about how the demand for high-­performance computing would rise—­how workloads including AI, scientific computing, and data analytics required enormous performance increases, which could only be attained through accelerated computing with GPUs and better networking. He explained how AI applications would eventually require tens of thousands of servers connected to one another and working together in concert, and the market-­leading networking technology from Mellanox would be critical to make that possible.

“Emerging AI and data-­analytics workloads demand data-­center-­scale optimization,” he said. Jensen was predicting that computing would move beyond one device—­that the entire data center would become the computer.

Jensen’s vision came true just a few years later. In May 2024, Nvidia disclosed that the portion of the company that was formerly Mellanox had generated $3.2 billion in quarterly revenue, up more than seven times from the final quarter in early 2020 in which Mellanox reported as a public company. After just four years, the former Mellanox business, which had cost Nvidia a one-­time fee of $6.9 billion, was generating more than $12 billion in annualized revenue and growing at triple-­digit rates.

“Mellanox was frankly a wonderful thing thrown in our lap by activists,” a senior Nvidia executive said. “If you talk to AI start-­ups today, InfiniBand, Mellanox’s networking technology, is incredibly important to scale the computing power and make everything work.”

Brian Venturo, cofounder and CTO of CoreWeave, a leading GPU cloud-­computing provider and a customer of Nvidia’s, argues that InfiniBand technology still has the best solution to minimize latency, control network congestion, and to make workloads perform efficiently.

Mellanox was a happy accident for Nvidia in some respects. Jensen wasn’t on top of it from the start. But once Nvidia identified and understood the opportunity, it made the decision to pursue Mellanox aggressively. It was a great deal, though the outcome depended on Nvidia’s ability to execute once the new business became part of the company. In those ways, Mellanox was a typical Nvidia achievement: the company pounced when others didn’t, and Mellanox helped power Nvidia’s rise to dominance in the AI space.

“It’s absolutely going to go down in history as one of the best acquisitions ever,” Nvidia’s head of global field operations, Jay Puri, said. “Jensen realized that data-­center-­scale computing requires really good high-­performance networking, and Mellanox was the best in the world at that.”

After seeing Nvidia achieve all that is has over the past decade, Jeff Smith of Starboard Value had one summarizing thought, too.

“We never should have exited the position.”

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USDC stablecoin issuer Circle files for IPO as public markets open to crypto

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USDC stablecoin issuer Circle files for IPO as public markets open to crypto

Jeremy Allaire, Co-Founder and CEO, Circle 

David A. Grogan | CNBC

Circle, the company behind the USDC stablecoin, has filed for an initial public offering with the U.S. Securities and Exchange Commission.

The S1 lays the groundwork for Circle’s long-anticipated entry into the public markets.

While the filing does not yet disclose the number of shares or a price range, sources told Fortune that Circle plans to move forward with a public filing in late April and is targeting a market debut as early as June.

JPMorgan Chase and Citi are reportedly serving as lead underwriters, and the company is seeking a valuation between $4 billion and $5 billion, according to Fortune.

This marks Circle’s second attempt at going public. A prior SPAC merger with Concord Acquisition Corp collapsed in late 2022 amid regulatory challenges. Since then, Circle has made strategic moves to position itself closer to the heart of global finance — including the announcement last year that it would relocate its headquarters from Boston to One World Trade Center in New York City.

Read more about tech and crypto from CNBC Pro

Circle is best known as the issuer of USDC, the world’s second-largest stablecoin by market capitalization.

Pegged one-to-one to the U.S. dollar and backed by cash and short-term Treasury securities, USDC has roughly $60 billion in circulation.

Circle is best known as the issuer of USDC, the world’s second-largest stablecoin by market capitalization.

Pegged one-to-one to the U.S. dollar and backed by cash and short-term Treasury securities, USDC has roughly $60 billion in circulation. It makes up about 26% of the total market cap for stablecoins, behind Tether‘s 67% dominance. Its market cap has grown 36% this year, however, compared with Tether’s 5% growth.

Coinbase CEO Brian Armstrong said on the company’s most recent earnings call that it has a “stretch goal to make USDC the number 1 stablecoin.” 

The company’s push into public markets reflects a broader moment for the crypto industry, which is navigating renewed political favor under a more crypto-friendly U.S. administration. The stablecoin sector is ramping up as the industry grows increasingly confident that the crypto market will get its first piece of U.S. legislation passed and implemented this year, focusing on stablecoins.

Stablecoins’ growth could have investment implications for crypto exchanges like Robinhood and Coinbase as they integrate more of them into crypto trading and cross-border transfers. Coinbase also has an agreement with Circle to share 50% of the revenue of its USDC stablecoin.

The stablecoin market has grown about 11% so far this year and about 47% in the past year, and has become a “systemically important” part of the crypto market, according to Bernstein. Historically, digital assets in this sector have been used for trading and as collateral in decentralized finance (DeFi), and crypto investors watch them closely for evidence of demand, liquidity and activity in the market.

More recently, however, rhetoric around stablecoins’ ability to help preserve U.S. dollar dominance – by exporting dollar utility internationally and ensuring demand for U.S. government debt, which backs nearly all dollar-denominated stablecoins – has grown louder.

A successful IPO would make Circle one of the most prominent crypto-native firms to list on a U.S. exchange — an important signal for both investors and regulators as digital assets become more entwined with the traditional financial system.

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Hims & Hers shares rise as company adds new weight-loss medications to platform

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Hims & Hers shares rise as company adds new weight-loss medications to platform

The Hims app arranged on a smartphone in New York on Feb. 12, 2025.

Gabby Jones | Bloomberg | Getty Images

Hims & Hers Health shares closed up 5% on Tuesday after the company announced patients can access Eli Lilly‘s weight loss medication Zepbound and diabetes drug Mounjaro, as well as the generic injection liraglutide, through its platform.

Zepbound, Mounjaro and liraglutide are part of the class of weight loss medications called GLP-1s, which have exploded in popularity in recent years. Hims & Hers launched a weight loss program in late 2023, but its GLP-1 offerings have evolved as the company has contended with a volatile supply and regulatory environment.

Lilly’s weekly injections Zepbound and Mounjaro will cost patients $1,899 a month, according to the Hims & Hers website. The generic liraglutide will cost $299 a month, but it requires a daily injection and can be less effective than other GLP-1 medications.

“As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience,” Dr. Craig Primack, senior vice president of weight loss at Hims & Hers, wrote in a blog post.

A Lilly spokesperson said in a statement that the company has “no affiliation” with Hims & Hers and noted that Zepbound is available at lower costs for people who are insured for the product or for those who buy directly from the company. 

In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. The offering was immensely popular and helped generate more than $225 million in revenue for the company in 2024.

But compounded drugs can traditionally only be mass produced when the branded medications treatments are in shortage. The U.S. Food and Drug Administration announced in February that the shortage of semaglutide injections products had been resolved.

That meant Hims & Hers had to largely stop offering the compounded medications, though some consumers may still be able to access personalized doses if it’s clinically applicable. 

During the company’s quarterly call with investors in February, Hims & Hers said its weight loss offerings will primarily consist of its oral medications and liraglutide. The company said it expects its weight loss offerings to generate at least $725 million in annual revenue, excluding contributions from compounded semaglutide.

But the company is still lobbying for compounded medications. A pop up on Hims & Hers’ website, which was viewed by CNBC, encourages users to “use your voice” and urge Congress and the FDA to preserve access to compounded treatments.

With Tuesday’s rally, Hims and Hers shares are up about 27% in 2025 after soaring 172% last year.

WATCH: Hims & Hers shares tumble over concerns around weight-loss business

Hims & Hers shares tumble over concerns around weight-loss business

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Meta’s head of AI research announces departure

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Meta's head of AI research announces departure

Meta CEO Mark Zuckerberg holds a smartphone as he makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.

Manuel Orbegozo | Reuters

Meta’s head of artificial intelligence research announced Tuesday that she will be leaving the company. 

Joelle Pineau, the company’s vice president of AI research, announced her departure in a LinkedIn post, saying her last day at the social media company will be May 30. 

Her departure comes at a challenging time for Meta. CEO Mark Zuckerberg has made AI a top priority, investing billions of dollars in an effort to become the market leader ahead of rivals like OpenAI and Google.

Zuckerberg has said that it is his goal for Meta to build an AI assistant with more than 1 billion users and artificial general intelligence, which is a term used to describe computers that can think and take actions comparable to humans.

“As the world undergoes significant change, as the race for AI accelerates, and as Meta prepares for its next chapter, it is time to create space for others to pursue the work,” Pineau wrote. “I will be cheering from the sidelines, knowing that you have all the ingredients needed to build the best AI systems in the world, and to responsibly bring them into the lives of billions of people.”

Vice President of AI Research and Head of FAIR at Meta Joelle Pineau attends a technology demonstration at the META research laboratory in Paris on February 7, 2025.

Stephane De Sakutin | AFP | Getty Images

Pineau was one of Meta’s top AI researchers and led the company’s fundamental AI research unit, or FAIR, since 2023. There, she oversaw the company’s cutting-edge computer science-related studies, some of which are eventually incorporated into the company’s core apps. 

She joined the company in 2017 to lead Meta’s Montreal AI research lab. Pineau is also a computer science professor at McGill University, where she is a co-director of its reasoning and learning lab.

Some of the projects Pineau helped oversee include Meta’s open-source Llama family of AI models and other technologies like the PyTorch software for AI developers.

Pineau’s departure announcement comes a few weeks ahead of Meta’s LlamaCon AI conference on April 29. There, the company is expected to detail its latest version of Llama. Meta Chief Product Officer Chris Cox, to whom Pineau reported to, said in March that Llama 4 will help power AI agents, the latest craze in generative AI. The company is also expected to announce a standalone app for its Meta AI chatbot, CNBC reported in February

“We thank Joelle for her leadership of FAIR,” a Meta spokesperson said in a statement. “She’s been an important voice for Open Source and helped push breakthroughs to advance our products and the science behind them.” 

Pineau did not reveal her next role but said she “will be taking some time to observe and to reflect, before jumping into a new adventure.”

WATCH: Meta awaits antitrust fine from EU

Meta awaits antitrust fine from EU

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