Jensen Huang resigned as Nvidia CEO after reports of extramarital affairs. Colette Kress was named interim CEO as investors worry about the future of Nvidia's startup investments and the broader AI ecosystem.
Jensen Huang, Nvidia's co-founder and CEO for 33 years, resigned following reports of extramarital affairs, including one with a woman alleged to be a Chinese spy. Nvidia's board met to decide his fate, and Chief Financial Officer Colette Kress was named interim CEO as the company searches for a permanent successor.
Nvidia has been a prolific investor in AI startups, participating in 105 funding rounds this year alone, often as the largest investor, according to PitchBook. The company backed neoclouds, inference providers, and open weight models. Nvidia held investments in Mistral AI, Lambda, and Black Forest Labs, and participated in Crusoe's $1.4 billion Series E round. Last year, it wrote an $800 million check into a $2 billion Series B round for Reflection AI.
Investors say Huang personally drove most significant investment decisions. "If that direction changes, it'll be a big blow to so many young companies," said Maria Davidson, founder of Relational Capital. Dawn Capital's Shamilla Bankiya said, "Nvidia is carrying almost every AI-native startup from application to neocloud."
Some investors expect Nvidia to become more conservative under Kress. "She's much more conservative," one investor said. "I don't think she's going to commit the same amount of money to keep the early-stage ecosystem going."
Nvidia shares fell 13% in premarket trading, and Nasdaq 100 futures were down 0.6%. Shares of Nvidia-backed data-center operator CoreWeave fell more than 7.5% in premarket trading. Shares of South Korea's Naver, in which Nvidia took a $1 billion stake by financing a data-center expansion, dropped 6%.
Chipmaking rivals Broadcom and AMD saw their shares rise, while China's leading GPU makers Moore Threads, MetaX, and Cambricon all jumped nearly 10%.
Nvidia listed $164.5 billion in financial commitments, with an obligation capped at $105 billion on an OpenAI data center in Ohio and lease and other capacity guarantees topping $50 billion. In August, Nvidia partnered with six major financial institutions including Apollo, BlackRock, and Blackstone to launch compute financing platforms aimed at raising over $500 billion in third-party capital for AI infrastructure. Huang said the company had the option to backstop up to $125 billion, or 25% of the potential deals.
"Nvidia has been called the 'Bank of AI'. They'll sell you the chips and loan you the money. If they have to take a step back because of what's going on, will that cut off funding to smaller companies that need it? That's an open question," said Joe Saluzzi, partner and co-head of equity trading at Themis Trading.
Nvidia is scheduled to report quarterly earnings on November 17. Analysts project 92% year-over-year revenue growth to $109.2 billion, according to LSEG.
Huang's departure removes a central figure who personally directed Nvidia's startup investments and GPU allocations. Investors worry that a more conservative approach under new leadership could reduce funding for early-stage AI infrastructure companies and slow the broader AI boom, though some analysts say underlying demand for AI computing remains strong.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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