Morning Bid: Scandal topples the AI star

Detailed summary

A look at the day ahead in European and global markets from Rae Wee A new era dawns for Nvidia with its longtime figurehead Jensen Huang abruptly out, plunging the chipmaker into crisis and sending shockwaves across the multi-trillion-dollar artificial intelligence industry he helped bankroll.

A new era dawns for Nvidia with its longtime figurehead Jensen Huang abruptly out, plunging the chipmaker into crisis and sending shockwaves across the multi-trillion-dollar artificial intelligence industry he helped bankroll.

The fallout from Huang's admission of an affair reverberated across markets this week, sending shares of Nvidia and its customers tumbling, and even triggering a slump in copper prices as traders question the durability of physical AI infrastructure demand.

And as if that wasn't enough of a mess, Washington is swooping in to turn up the heat and stoking worries about China's future access to Nvidia's chips. US House Speaker Mike Johnson signalled a hardening consensus in Congress on limiting chip exports to the world's second-largest economy.

US Senate Banking Committee Chairman Tim Scott meanwhile sent letters on Thursday to Commerce Secretary Howard Lutnick and Huang, asking them to testify over recent developments at the company. Senior White House officials are separately discussing whether Lutnick should be pushed out.

The crisis underscores Nvidia's rapid rise as the lynchpin of the global AI ecosystem, with its influence extending across business and politics, and threatening to shatter an AI rally that was already on shaky ground.

Asian shares managed to find their footing on Friday after last week's bloodbath sparked by the Republicans' electoral drubbing in the US, which stoked fears that tighter regulation could slow the AI infrastructure buildout that has helped send stocks to record highs this year.

Elsewhere in markets, the dollar held near a 19-month high and was on track for its largest weekly gain in over a month, as investors weighed the prospect of an outsized 50-basis-point rate hike by the Federal Reserve next month.

There's an active debate about more aggressive action on the part of the Fed after this week's stronger-than-expected inflation data, which left policymakers opening the door to a quicker pace of tightening.

The…

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