Nvidia shares fell 9.5% on Thursday following the shock resignation of CEO Jensen Huang, with the company on track to lose more than $700 billion since the close of U.S. trading the previous week. Nvidia announced Huang's departure on Thursday morning and said Chief Financial Officer Colette Kress will serve as interim CEO. The stock dropped $16.54 to $157.19 in early trading, extending losses that began after the weekend disclosure that Huang had an extramarital affair with a woman U.S. intelligence agencies believe was a Chinese asset. Nvidia shares had already shed 9.6% of their value in trading on Monday and Tuesday.
Huang co-founded Nvidia in 1993 and had become one of the world's most recognizable executives, serving as the public face of the artificial intelligence industry. He promoted AI's benefits and argued that new regulations were unnecessary for its safety. Nvidia's powerful semiconductors power many of the world's leading AI firms, making it a key player in the sector. Because of the company's importance to the industry, its chips are subject to export controls that limit sales to China, regulations Huang had lobbied the Trump administration to relax.
Wall Street analysts had previously warned that Nvidia's stock could plunge if Huang were ousted or resigned, viewing him as essential to the company's success. Yorkville Ives analyst Dan Ives said in a research note that Huang running Nvidia as CEO was no longer possible from an investor perspective. Ives estimated Nvidia's value at $225 per share if Huang left, compared with $300 per share if he remained. However, Ipek Ozkardeskaya, senior analyst at Swissquote, noted that customers buy Nvidia's computing power, software and networking ecosystem, which would not disappear with a change in CEO leadership.
The New York Times reported separately on Thursday that Huang also had an affair with Kimberly Powell, Nvidia's vice president of healthcare, citing other company employees. Nvidia's leadership crisis comes as the broader AI industry faces investor concerns about a potential slowdown and questions about whether the sector will prove profitable enough to justify massive investments in the technology. Anthropic, the Claude AI bot developer, is expected to make its market debut as early as next week, providing another key test for investor confidence in AI companies.
For savers and investors in the United States, Nvidia's crisis means the value of their holdings in the chipmaker has sharply declined, with broader questions now emerging about whether AI sector investments can deliver expected returns.