The scandal has thrown Silicon Valley into uncertainty. CEO left with his money

Jensen Huang, CEO of Nvidia, the world's second most valuable company, resigned from his post after his illicit relationship with Alice Huang was revealed to be a Chinese spy.

While Huang's sudden departure created a shock effect in the technology world, the company's shares lost 12.75 percent from the beginning of the week until Friday closing.

According to CNN, this sharp decline caused approximately $573 billion to be erased from Nvidia's market value.

Nvidia's board of directors appointed Colette Kress, the company's long-time chief financial officer, as interim CEO.

The process that triggered the crisis began when news emerged that Huang had multiple extramarital affairs.

It was reported that among the names he had a relationship with was Alice Huang, a Chinese businesswoman who is a former executive of Nvidia customer Megaspeed and who US authorities are investigating as a possible national security risk.

Nvidia's board of directors announced on Sunday last week that it would investigate whether Huang was the target of a foreign intelligence operation, but stated that it trusted his leadership.

On the same day, Huang also admitted to having an extramarital affair, but did not disclose the name of the other party.

However, as national security concerns grew in the US Congress in the following days and it was revealed that Huang had at least one more extramarital affair, the board of directors convened on Wednesday night.

Huang, 63, left his job the next morning and parted ways with the company he co-founded in a restaurant in 1993 and had been managing for 33 years.

Huang's departure has thrown into uncertainty not only Nvidia shareholders, but also Silicon Valley startups, which have been surviving on the financing and computing power provided by him for years.

According to the New York Times (NYT) newspaper, based on securities filings, Nvidia had $48 billion worth of shares in 229 private companies, including OpenAI and Anthropic, as of the end of July.

The company also provided $165 billion in rental guarantees and various financial support for cloud computing to startups and other companies.

Tomasz Tunguz, investor of venture capital fund Theory Ventures, summed up the situation in his statement to NYT: "Nvidia is the central bank of artificial intelligence and suddenly the Fed chairman left office."

Hanabi Capital investor Mike Volpi, who supports artificial intelligence companies, predicted that Nvidia will be more conservative in supporting small cloud companies from now on.

“In the short term, I expect to see some turbulence in the market and some Nvidia funds exiting the market,” Volpi said.

Samantha Lau from the investment company AllianceBernstein stated that young data center companies planning an IPO will lose an important source of financing and said, "The god of circular financing is hibernating."

Sujay Jaswa, partner of venture capital firm Wndr, compared Huang's resignation to the death of Steve Jobs and said, "It is a huge loss for all of us."