Global stocks decline amid anticipation of the repercussions of the “NVIDIA” crisis on the artificial intelligence sector

Stocks fell in most European and Asian markets during Friday trading, but losses remained limited, at a time when investors are evaluating the repercussions of Jensen Huang’s resignation from his position as CEO of NVIDIA on the global artificial intelligence industry.

In a separate development, a widespread malfunction in Microsoft electronic services caused disruption to email accounts and a number of applications around the world, but its direct impact on the markets seemed limited, according to the Associated Press.

Microsoft said, in an update issued on Friday, that the malfunction affected a wide range of Microsoft 365 services related to Online Exchange and email services. Users reported disruptions to services including Outlook, Teams, and the AI-powered assistant CoPilot. US stock futures were largely stable.

In early European trading, the German DAX index fell by 0.1 percent to 26,748.60 points, and the French CAC 40 index fell by the same percentage to 8,353.98 points. The British FTSE 100 index fell 0.1 percent to 10,856.66 points.

In Asia, the Japanese Nikkei 225 index rose 0.5 percent to 61,142.35 points. The shares of Tokyo Electron, which specializes in chip manufacturing equipment, rose by 1.7 percent, while the shares of Kioxia Holdings, which manufactures memory chips, fell by 2.3 percent. The shares of SoftBank Group, an investor in OpenAI, also fell by 5.1 percent.

In South Korea, the benchmark KOSPI index fell by 1 percent to 5,290.53 points. The shares of Samsung Electronics, one of the largest South Korean companies by market value, fell by 1 percent, while the shares of SK Hynix, which specializes in manufacturing memory chips, fell by 3 percent.

On the other hand, the Taiwanese TAEX index rose by 1.4 percent, with the shares of TSMC, the largest chip manufacturer in Taiwan, rising by 0.4 percent.

The departure of Huang, who co-founded NVIDIA and was one of the most prominent architects of its pivotal role in the artificial intelligence boom, raised questions about the company's future. Its shares fell by 4 percent following the announcement of his resignation.

Huang's resignation came after the revelation of a romantic relationship he had with an executive at a Chinese technology company. Which raised concerns about American national security. The company's veteran CFO, Colette Cress, will serve as interim CEO.

“Nvidia” is one of the main pillars of the artificial intelligence boom, and competes with “Apple” for the title of the company with the highest market value on “Wall Street,” and has also invested heavily in other companies working in this field. Investors are awaiting the repercussions of its potential crisis on the upcoming initial public offerings of artificial intelligence companies, including the potential offering of Anthropic, whose value is estimated at about $1.3 trillion.

The stock prices of many Asian companies producing computer chips, servers, and other equipment used in artificial intelligence applications are closely linked to the pace of infrastructure development for this sector in the United States.

In other markets, the Hang Seng Index in Hong Kong fell by 1.6 percent to 23,637.60 points, and the Shanghai Composite Index fell by 0.6 percent to 3,634.35 points.

The Australian Standard & Poor's ASX 200 index fell by 0.7 percent to 9,082.20 points, while the Indian Sensex index fell by 0.6 percent.

Wall Street indices ended Thursday's trading with a decline. The Standard & Poor's 500 Index fell by 0.4 percent, the Dow Jones Industrial Average fell by the same percentage, and the Nasdaq Composite Index, which is dominated by technology stocks, fell by 0.4 percent.

On the other hand, shares of some of Nvidia's competing companies rose, led by AMD, whose shares rose by 5.9 percent during Thursday's trading.

Pressure on stocks also came in light of the rise in oil prices, after US President Donald Trump said on Thursday that the United States “does not need an agreement with Iran,” despite the continuing conflict in the Middle East.

“We do not need an agreement with Iran,” Trump wrote in a social media post. Those days are long gone. “We got their money, hundreds of billions of dollars, and the strait is under our control.”

In early trading on Friday, Brent crude futures, the global benchmark for oil prices, rose 0.3 percent to $96.07 per barrel. Crude oil was trading near $72 a barrel in late February, before the outbreak of war with Iran.

Standard US crude futures also rose by 0.1 percent to $88.08 per barrel.

The repercussions of the global outage that struck Microsoft services continued on Friday, disrupting the work of companies and government institutions from Asia to the United States, amid ongoing attempts to restore full operation of email services, business applications, and artificial intelligence. The disruption included the services “Outlook,” “Teams,” and the artificial intelligence assistant “Copilot,” in addition to applications linked to the “Microsoft 365” platform, which organizations rely on to manage their communications and daily operations. The Down Detector website, which specializes in monitoring digital malfunctions, recorded more than 130,000 reports of problems in Outlook during the peak of the crisis, on Thursday, before the reports declined later, without this meaning that all services were restored normally. Microsoft announced that it is continuing to address the problem, after it acknowledged that some of the technical measures it took to improve the systems' performance did not achieve the expected results. The company confirmed that there are no indications that the malfunction resulted from a cyber attack, stressing that it is treating the incident as a top priority until services are fully restored, without announcing a final cause for the disturbance.

In Australia, Home Affairs Minister Tony Burke said that Microsoft officials likened the incident to the “Crowd Strike” failure in July 2024, which caused widespread disruption in the aviation, banking and hospital sectors, as a result of a defective software update. However, this analogy does not confirm that the causes of the two accidents are identical, especially since the technical investigations into the current malfunction have not been completed. The repercussions extended to commercial activities. The American industrial technology company Workhorse Group was forced to postpone a phone conference to discuss its quarterly results due to the outage of services.

In Hong Kong, Danny Lau, who runs an aluminum company, said that the disruption of Outlook accounts prevented his company from receiving updates from American customers, warning that the continuation of the problem may affect production schedules. This example highlights how email outages can turn into an economic problem, when they delay orders or disrupt coordination between suppliers and customers across borders.

In the aviation sector, Air India announced that its flight operations were not affected, but it temporarily switched email services to ensure continued reception of customer inquiries. Indian "IndiGo" also said that the malfunction affected email support services, while other communication channels and air operations remained operating normally.

The unrest affected government agencies. The Government Technology Agency in Singapore announced the disruption of email, while the Supreme Court in the Philippines confirmed that some of its operations, including electronic responses, were affected. In Japan, Deputy Chief Cabinet Secretary Masanao Ozaki said that the malfunction affected the government's information infrastructure, stressing that the authorities are monitoring developments in the crisis. The effects extended to the artificial intelligence sector, after the companies “OpenAI” and “Anthropic” reported problems connecting to “Microsoft 365” tools, which reflects the increasing interdependence between cloud platforms and smart applications.

Economically, there were no reliable estimates of the size of the total losses, but the disruption caused the postponement of meetings and the disruption of commercial communications and services to customers, with the possibility of higher operational costs if the interruption lasts for a long time. The crisis highlights the dangers of intense reliance on a single digital services provider, especially with the expansion of the use of cloud computing and artificial intelligence in vital sectors. During the coming hours, attention will focus on Microsoft's ability to restore full operation and determine the technical cause of the failure, while the incident is likely to prompt more organizations to review business continuity plans, strengthen alternative communication channels, and reduce the risks of stopping operations when cloud services fail.