Colette Kress, Nvidia’s CFO, takes over as interim CEO
Jensen Huang stepped down Thursday as chief executive of Nvidia, the company that dominates the market for the computer chips used to train and run AI models. His resignation followed reports of extramarital affairs, including with a suspected Chinese spy, and it rippled through a technology industry already built around Nvidia’s supply of processors.
Nvidia trades off with Apple as Wall Street’s most valuable company, and Huang has been among the industry’s most prominent boosters of artificial intelligence. In March, he predicted Nvidia would be grappling with a $1 trillion backlog in orders for its chips by the end of the year, doubling his estimate from a year earlier.
Shares of some of Nvidia’s biggest rivals advanced Thursday as investors predicted its customers will look to diversify their suppliers. Broadcom, Intel and Advanced Micro Devices all saw gains. In the end, analysts say, this might not be a bad thing. Bret Greenstein, chief AI officer at the global consultancy West Monroe, said the shift could open a market that has looked closed.
“This could turn what has effectively been a monopoly into a horse race again, as competitors rush to meet growing demand,” Greenstein said. “Nvidia did not create that demand, and a shift in this part of the market could ultimately diversify the supply chain, create more choice for customers and strengthen the broader AI industry in the years ahead.”
Nvidia carved out an early lead by tailoring its chipsets, known as graphics processing units or GPUs, from powering video games to helping train powerful AI systems, and demand soared as tech companies scrambled for more chips. In annual filings, Nvidia has identified competitors including Advanced Micro Devices, Intel, Broadcom and cloud services companies like Google, Amazon and Microsoft. Those players are established and respected within the industry for their chips, and they have been trying to catch up to Nvidia.
Jay Aldebert, chief growth officer of International Services Inc., said Nvidia has had an advantage from the start, and that as soon as a competitor releases something just as good, Nvidia has put out the next better chip. “Nobody’s just sitting still,” he said.
Chester Spatt, a finance professor at Carnegie Mellon University, said competitors’ gains are going to be smaller than Nvidia’s losses, but he also anticipates chip purchasers could become “much more reluctant to concentrate their purchases with a single source.”
The episode is also expected to prompt elected officials to seek stronger export controls on American-made chips — a step that could benefit Chinese chipmaker Huawei, another Nvidia competitor. Lizzi C. Lee, of the Asia Society Policy Institute, said she suspects Chinese AI firms could accelerate efforts to secure overseas computing capacity ahead of tighter controls.
“Chinese chipmakers have already rallied on Nvidia’s troubles, but China’s AI developers depend heavily on Nvidia’s ecosystem,” Lee said. “This could be both an opportunity and a headache for China.”
Huang was not the only public figure in AI — OpenAI’s Sam Altman, Google’s Demis Hassabis and Nobel Prize winner Geoffrey Hinton are among the others — but he was an influential one: one of the industry’s most prominent and visible advocates for AI, with access to and support from President Donald Trump. He has advocated a light touch on AI regulation and has been bullish about AI’s potential to transform society, creating faster economic growth and more scientific breakthroughs.
Asa Hiken, a senior analyst for research firm eMarketer, called the resignation “a watershed moment for Nvidia, which now has to prove it can maintain its AI dominance without the leader largely responsible for building it,” and said that “given the broader AI industry’s heavy dependence on Nvidia’s chips, Huang’s departure introduces uncertainty well beyond the company itself.”
Lee, of the Asia Society Policy Institute, said the resignation fallout will ripple across the AI ecosystem. “Obviously Nvidia’s technological leadership won’t disappear, but Huang had played an outsized role as its chief strategist, dealmaker and — very importantly — political advocate, with close access to both Washington and Beijing,” she said. “This happens at a critical juncture when markets are already questioning the sustainability of massive AI spending.”
Kress, Nvidia’s CFO turned interim CEO, has been a key force behind the company’s strategy of partnering with and investing in firms that buy its chips. That approach is under closer scrutiny as the scandal and resignation have rattled the market. CoreWeave, which buys Nvidia chips and rents out access to them over the cloud, closed down almost 7% on Thursday; Nvidia holds a nearly 13% stake in the company.
Aldebert said leadership across the tech sector likely spent much of Thursday in meetings aiming to figure out a “backup plan” for some of their financing, and described the circular financing practice as “incestuous.”
Many experts will be keeping a keen eye on what Huang’s departure and its fallout mean for pending public debuts of AI companies like Anthropic’s pending IPO, valued at $1.3 trillion. The resignation also comes in the wake of midterm elections in which data-center opposition was a prominent campaign theme, ushering in many Democrats promising aggressive stances on AI regulation.
“This is all very interconnected and I think that we’re going to see a lot interesting dynamics happening the next month as it plays out,” Greenstein said.