Nvidia CEO Jensen Huang Resigns Amid Scandal, Shaking Tech Markets

Nvidia holds a backlog of orders valued at $1 trillion for its specialized computer chips, a figure that CEO Jensen Huang projected the company would reach by the end of this year. That prediction, made in March, represented a doubling of the estimate provided a year earlier. It underscores the sheer scale of demand for the hardware used to train and run artificial intelligence models.

Huang announced his resignation on Thursday. The announcement followed reports of extramarital affairs, including one with a suspected Chinese spy. Huang served as the public face of Nvidia, a company that trades value with Apple as the most valuable firm on Wall Street. The chipmaker has also invested heavily in other firms within the AI sector.

The news caused immediate shifts in the stock market. Shares of Nvidia’s primary rivals, including Broadcom, Intel, and Advanced Micro Devices, rose on Thursday. Investors appear to be positioning for a scenario where customers diversify their supplier base. Bret Greenstein, chief AI officer at the consultancy West Monroe, stated that the situation could transform the market from a monopoly into a competitive race. He noted that competitors are rushing to meet growing demand that Nvidia did not create but has dominated.

Nvidia established an early lead by adapting graphics processing units, originally designed for video games, for AI training. Jay Aldebert, chief growth officer of International Services Inc., observed that Nvidia has historically released superior chips as soon as competitors released comparable technology. Despite this history, Aldebert noted that no company remains stationary. Chester Spatt, a finance professor at Carnegie Mellon University, cautioned that the gains for rival chipmakers will likely be smaller than Nvidia’s losses. He predicted that chip purchasers will become more reluctant to concentrate their purchases with a single source.

The resignation also influences policy discussions regarding export controls on American-made chips. Lizzi C. Lee, a fellow at the Asia Society Policy Institute, suspects Chinese AI firms will accelerate efforts to secure overseas computing capacity ahead of tighter controls. She described the situation as both an opportunity and a headache for China. Chinese chipmakers have already rallied in response to Nvidia’s troubles, yet China’s AI developers remain heavily dependent on Nvidia’s ecosystem.

Huang’s role extended beyond technical leadership. He served as an influential evangelist for AI, advocating for light-touch regulation and maintaining close access to President Donald Trump. He predicted AI would create faster economic growth and more scientific breakthroughs. Asa Hiken, a senior analyst at research firm eMarketer, called the resignation a watershed moment. She stated that Nvidia must now prove it can maintain its dominance without the leader largely responsible for building it. Given the industry’s heavy dependence on Nvidia’s chips, Hiken said the departure introduces uncertainty beyond the company itself.

Nvidia’s business model includes numerous partnerships and investments in companies that purchase its chips. Colette Kress, Nvidia’s CFO and new interim CEO, has been a key force behind this strategy. The approach, often described as circular financing, is under closer scrutiny. CoreWeave, a company that buys Nvidia chips and rents access to them via the cloud, saw its stock close down almost 7% on Thursday. Nvidia holds a nearly 13% stake in CoreWeave.

Aldebert said that tech sector leaders likely spent Thursday in meetings aimed at developing backup plans for their financing. He described the circular financing practice as incestuous. The market is also watching pending public debuts, such as the IPO for Anthropic, which is valued at $1.3 trillion. The resignation comes after midterm elections where many Democrats promised aggressive stances on AI regulation. Lee noted that Huang played an outsized role as a political advocate with access to both Washington and Beijing. She added that this happens at a critical juncture when markets are already questioning the sustainability of massive AI spending.