The resignation of the head of “NVIDIA” exacerbates the losses of artificial intelligence stocks globally

Shares of companies related to artificial intelligence fell globally, Thursday, after the resignation of Nvidia CEO Jensen Huang, against the backdrop of a worsening scandal related to his personal relationships, in a development that confused the leadership of the chip manufacturer, and raised new risks to a sector that already faces concerns about financing and regulatory restrictions.

The company said that its chief financial officer, Colette Kress, will assume the position of interim CEO, while NVIDIA is searching for a permanent successor to Huang, according to Reuters.

NVIDIA is a key hub in the artificial intelligence system. It finances infrastructure based on its chips, a strategy that has drawn scrutiny over circular finance, and the current crisis could have additional repercussions for the sector.

AI stocks have struggled since Democrats won the midterm elections, including in states that oppose the construction of new data centers. This has raised concerns that tighter regulatory restrictions will slow the expansion of AI infrastructure.

Nvidia shares fell by 10.3 percent during early trading before the market opened. This put its market value on track to fall below $4 trillion for the first time since July 2025.

Shares of CoreWave, which specializes in cloud computing services and is supported by Nvidia, fell by 13.6 percent, after rising by more than 27 percent during the previous session, when its business results sparked a wave of recovery in artificial intelligence stocks.

Shares of other companies in the specialized cloud computing sector also declined, including “Irene” and “Applied Digital.” Nebios shares fell by 20 percent, after the company announced that its revenues for 2026 would come at the minimum of its previous expectations.

Nvidia has lost about $300 billion in market value since its board of directors announced, on Sunday, the opening of an investigation into Huang’s relationship with a businesswoman named Alice Huang, who is alleged to be a Chinese spy.

“He is the face that represents NVIDIA, and the company has been at the forefront of expansion in the field of artificial intelligence,” said John B. Liu, principal portfolio manager at TinCap.

He added: “If we look at the number of new cloud computing and data center companies that have received support within the framework of this circular financing system, we will find that (NVIDIA) stands behind almost all of them, and therefore; “What happens will have very important repercussions on the next stage.”

The shares of Micron Technology, which specializes in manufacturing memory chips, fell by 5.8 percent, and the shares of data storage companies SanDisk and Western Digital fell by 8.5 and 5.2 percent, respectively. Shares fell; The two photonic products companies, Lumentum and Coherent, and the artificial intelligence server company, Dell, by about 7 percent each.

Shares of companies related to the chip industry, including Marvell Technology, Intel, Arm Holdings, and Texas Instruments, also declined by rates ranging between 4.5 and 6.3 percent.

On the other hand, the shares of AMD and Broadcom, which also produce chips for artificial intelligence and compete with Nvidia, rose by two and 1.4 percent, respectively, amid expectations that the turmoil facing Nvidia will provide opportunities for its competitors.

The state of anxiety extended to technology-heavy stock markets around the world. Markets in Japan and South Korea closed down by about 0.7 percent, and shares of technology companies in Europe fell by about one percent.

Investors who bet on a decline in Nvidia's stock achieved book profits amounting to about $3.8 billion until the close of the previous session. With the share price falling to $163, these profits may rise to about $6.8 billion, according to data from Ortex Analytics.

Nvidia's stock is trading at about 12 times its expected profit estimates over the next 12 months, which is its lowest level since November 2012, according to data compiled by the London Stock Exchange Group (LSEG).

Jensen Huang's resignation from the presidency of NVIDIA was not just the end of the career of a CEO who led his company to the top of the artificial intelligence industry, but rather a revealing moment of a crisis that extended from his personal life to the security of American technology, and ended by raising a larger question about the future of the company itself. The man whose name was linked to the rise of a chip giant with a market value exceeding $4 trillion left his position after reports of two extramarital affairs, one of them with a woman suspected of being linked to Chinese intelligence, amid investigations into the transfer of advanced chips to China, and increasing scrutiny of the company’s links to Washington’s technology policies.

With CFO Colette Kress temporarily assuming leadership and the search for a permanent successor beginning, Nvidia faces a test that goes beyond containing the fallout from the case to proving that the artificial intelligence empire that Huang built is capable of continuing on its path without him.

US House of Representatives Speaker Mike Johnson said it was crucial to choose a suitable successor to replace Hwang.

From a personal relationship to a national security file

The issue began to take on broader dimensions after Huang admitted, in a letter to company employees on Sunday, that he had been unfaithful to his wife, offering his apology for harming the trust of his family and his employees. This came after reports of his relationship with Alice Huang, a former executive at the Singaporean company Megaspeed International, which uses Nvidia chips in data center projects.

Media reports, citing US intelligence officials, say that Alice Huang, also known as Huang Li, is suspected of being linked to Chinese intelligence and passing information to Beijing. The US authorities did not announce final results proving these allegations, while China denied its involvement in an attempt to lure or recruit the president of NVIDIA.

In a development related to the ongoing investigations in Singapore, the Ministry of Interior announced yesterday that it had issued a severe warning to Alice Huang and prevented her from returning to the country, after the police concluded that she had provided inaccurate information about her role in “Megaspeed,” with the aim of reducing her responsibility. The Ministry explained that the police concluded in February 2026, after consulting with the Public Prosecutor’s Office, that there was insufficient evidence to prove that they had committed violations related to those statements.

The issue takes on a dimension that goes beyond the personal relationship in view of the suspicions surrounding Megaspeed's commercial activity, as the company is subject to American scrutiny regarding the possibility of transferring advanced chips it purchased from Nvidia to China, which may constitute a circumvention of export restrictions imposed by Washington. Since 2022, the United States has imposed restrictions on the export of the most advanced artificial intelligence chips to China, to limit its access to technology with military and strategic uses.

On the other hand, Huang repeatedly defended allowing American companies to sell more chips to the Chinese market, warning that keeping them away from this market might push Chinese competitors to develop local alternatives.

Another relationship increases the pressure

The reports were not limited to Huang's relationship with Alice, as the Wall Street Journal and the Financial Times revealed another relationship said to be between him and Kimberly Powell, an executive at NVIDIA who supervises the company's work in the healthcare sector and has worked there for more than 18 years. This information raised questions about governance and conflicts of interest, in light of the alleged relationship between the CEO and one of the female officials under his management.

According to the Financial Times, the board of directors hired a former federal prosecutor to investigate Huang’s relationship with Alice, and held an urgent meeting the day before yesterday evening to discuss the repercussions of the case. Although the Board had previously expressed its support for Huang's continuation in his position, the options now include him temporarily stepping away from his duties or leaving the company. On the other hand, the Wall Street Journal reported that the council was preparing to dismiss him, without an official announcement of a final decision.

In parallel, Megaspeed announced yesterday its readiness to cooperate with the US government in investigations related to exports of sensitive chips, and said that it had hired an American law firm to review the graphics processing units it owns and verify their compliance with export rules. The company's statement did not refer directly to Huang or Alice, but it comes amid suspicions that chips it purchased were being diverted to China.

The Singaporean police are still investigating the company's activities, stressing that the country will not tolerate companies using their presence on its territory to circumvent export controls in other countries. Commercial registration data reflects the rapid growth of Megaspeed. Its assets multiplied about 90 times between the end of 2023 and the end of 2024, approaching $3 billion, while its revenues exceeded $294 million in 2024, after not recording any revenues in the previous year.

Washington is reviewing the company's links to chip politics

Over the past two years, Huang has become one of the most prominent influential voices in US policy discussions related to artificial intelligence and chip exports. He met Trump repeatedly, participated in high-level events at the White House, and also joined the President's Council of Advisors on Science and Technology. Last January, the US administration allowed the sale of H200 chips to China under specific conditions, after pressure from the company and its CEO to ease restrictions on exports.

But this convergence has also come under scrutiny. Lawmakers from both parties called for an investigation into Huang's links to the file of chip exports to China, and Democratic Senators Elizabeth Warren and Chris Coons called on prominent officials in the Trump administration to preserve documents related to NVIDIA's exports to the Chinese market.

In this context, US Trade Representative Jamieson Greer said, in an interview with CNBC yesterday, that the United States is still “concerned about Nvidia,” without specifying the nature of these concerns. The statement reflects continued official concern about the company, at a time when questions are increasing about the adequacy of controls governing the access of advanced American technology to China.

Testing succession in a founder-centric company

Huang's resignation puts the issue of succession at the forefront of the challenges facing NVIDIA. He co-founded the company in 1993 and led it for more than three decades, becoming its most prominent face and strategic center of gravity. He owns about 3.6 percent of its shares, making him its largest shareholder. He also supervised about 60 officials who reported directly to him.

Huang had expressed reservations about traditional succession planning, preferring to continuously transfer knowledge and responsibilities between leaders rather than develop a specific plan to change them. However, this approach is facing a real test now, as the Board of Directors begins the search for a permanent CEO, and at a time when the company’s disclosures do not include an announced plan for his succession.

Nvidia's annual disclosures warn of its heavy reliance on its long-term executive team, noting that failure to ensure an effective leadership transition may harm strategic planning, implementation, and long-term success. This warning is particularly important in a company whose rise has been linked to the personality of its founder, and whose chips, partnerships, and investments have become a pivotal part of the global artificial intelligence system.

The repercussions of the resignation were quickly reflected in the shares of the artificial intelligence sector, as “Nvidia” shares deepened its losses to 13 percent in pre-market trading, amid a wave of selling that affected chip companies, cloud computing, and data centers. CoreWave shares fell by 13.6 percent, while shares of other companies in the sector declined, including Nebius, Micron Technology, SanDisk, and Western Digital. The decline extended to global technology markets, reflecting investors' fears about the repercussions of Huang's departure on the artificial intelligence system centered around NVIDIA.

Thus, Nvidia faces a double test: dispelling suspicions about the arrival of its chips to prohibited destinations, and proving its ability to manage a leadership transition that maintains its momentum and position in the artificial intelligence industry, without relying on its founder, whose name is associated with its success.