Global AI stocks sink as Nvidia CEO's exit deepens sector selloff

Detailed summary

Nov 12 (Reuters) - Global AI-linked stocks fell on Thursday after Nvidia CEO Jensen Huang resigned following a deepening scandal around his affairs, upending the chipmaker's…

Nov 12 (Reuters) - Global AI-linked stocks tumbled on Thursday as Nvidia CEO Jensen Huang resigned following a deepening scandal around his affairs, upending the chipmaker's leadership and posing fresh risks to a sector already reeling with funding and regulatory concerns.

Chief Financial Officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, the company said.

As the centerpiece of the AI ecosystem, the chipmaker finances infrastructure built around its chips - a strategy that has drawn scrutiny over circular funding and now risks weighing on the sector as its crisis deepens.

Nvidia's shares fell 8.2% to a more than 16-month low in early trading and its market value was on track to close below $4 trillion for the first time since July 2025.

"Nvidia has been called the 'Bank of AI'. If they have to take a step back because of what's going on, will that cut off funding to smaller companies that need it? That's an open question," said Joe Saluzzi, partner and co-head of equity trading at Themis Trading.

Nvidia-backed neocloud firms CoreWeave dropped 9.1% after surging more than 27% in the previous session when its earnings ignited a relief rally in AI stocks.

Other neocloud stocks including IREN and Applied Digital were also trading lower. Nebius dropped 16.2% after the company said its 2026 revenue would come in at the low end of its previous forecast.

Nvidia has lost more than $550 billion in market value since the board announced an investigation on Sunday into Huang's relationship with a businesswoman called Alice Huang, who is alleged to be a Chinese spy.

"The interlocking deals that Nvidia has with so much of the industry raises the question into whether that created more stability or more fragility. We're going to find out over the next few weeks as this whole situation unravels," said Steve Sosnick, chief market analyst at Interactive Brokers.

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