Will Jensen Huang’s resignation be the beginning of the artificial intelligence bubble bursting?

As investors pour trillions of dollars into artificial intelligence companies, chip manufacturers and data center developers, the artificial intelligence industry has become the most reliable driver of U.S. economic growth, and some even believe it is the only reliable driver.

No company is more central to this growth than NVIDIA. Data centers that provide computing power for artificial intelligence are filled with NVIDIA chips, and NVIDIA's funds also provide support for the construction of these data centers. And, at least until this week, it was hard to imagine Nvidia without Jensen Huang, its dashing leather-jacketed co-founder and CEO.

All of which means that Huang's resignation on Thursday, following a string of scandals worthy of Hollywood drama, has implications not just for Nvidia and its investors, but for nearly every American.

As Aaron Klein, an expert on financial regulation at the Brookings Institution, puts it: “Can one CEO’s sex life bring down the entire economy?”

In a literal sense, the answer is almost certainly no. No one thought Huang’s resignation would in itself end the AI ​​boom, let alone tip the economy into recession. Nvidia shares fell sharply on Thursday, but the broader market saw little movement.

However, Klein's tongue-in-cheek remark speaks to Huang's unique role at Nvidia and Nvidia's role in building artificial intelligence infrastructure.

Nvidia has about 90% of the market for state-of-the-art chips used to train and run artificial intelligence models. The company's turmoil could create opportunities for rivals such as AMD and Intel to eat into its market share. But there is little reason to believe that Huang's resignation will jeopardize Nvidia's ability to develop and produce the chips it has promised to deliver to customers.

However, Nvidia is not only a dominant chip manufacturer, it is also the "central bank of the artificial intelligence industry", providing financing support for the development of the entire industry through a series of complex transaction arrangements with customers and suppliers.

In August this year, Nvidia provided a $105 billion loan guarantee when OpenAI signed a contract to lease a 10-gigawatt data center in Ohio. A few days later, Nvidia collaborated with a number of Wall Street companies to set up a US$500 billion fund to provide financing for artificial intelligence-related infrastructure. Nvidia also holds more than 10% of large data center operator CoreWeave and has guaranteed billions of dollars in loans.

Nvidia's loan commitments and financing arrangements would make it the 10th largest U.S. bank, according to estimates by Ryan Cummings, director of the Stanford Institute for Economic Policy Research.

"Nvidia is at the center of this round of financing, and obviously the center of Nvidia is Jensen Huang," Cummings said. “It’s inarguable that he has been the driving force behind a lot of artificial intelligence construction.”

Cummings said Nvidia's role may change now that Huang is no longer at the helm. Other companies may fill the void it leaves, but that's not a sure thing.

Huang Renxun's resignation comes at a time when the artificial intelligence industry is in a sensitive period. In recent months, there have been signs that investors are increasingly doubtful that companies will be able to generate returns from their huge investments in artificial intelligence that justify those investments, and even if they are finally achieved, it may take longer than expected.

And Democratic victories in last week's midterm elections could lead to new restrictions on data center construction, which could jeopardize the industry's prosperity.

"This adds another layer of uncertainty at a time when people are already nervous about this wave of investment," Cummings said.

In the past, whenever the market had doubts about the development prospects of artificial intelligence, Huang Jensen and Nvidia always stepped in to dispel these doubts: either announcing outstanding sales results or providing financing support for data center projects with worrying prospects. This time around, it’s unclear who will fill the void they left behind.

“Could misconduct by the CEO of the world’s largest artificial intelligence company be the trigger for the bubble to burst?” Klein asked. "It's possible. It sounds crazy, but when a company is so central, it can happen."