Nvidia sell-off continues after CEO Jensen Huang steps down

Detailed summary

Shares of Nvidia, the chipmaker at the centre of the global artificial intelligence boom, tumbled Thursday with the sudden departure of CEO Jensen Huang following revelations of an affair with a woman reported to be a suspected Chinese spy.

NEW YORK — Shares of Nvidia, the chipmaker at the centre of the global artificial intelligence boom, tumbled Thursday with the sudden departure of CEO Jensen Huang following revelations of an affair with a woman reported to be a suspected Chinese spy.

The company’s stock has been under pressure for weeks, both because of reporting about the affair and questions about a potential bubble in the AI sector.

Shares fell five per cent in afternoon trading, more than 30 per cent below the company’s all-time high reached just over a month ago.

The New York Times reported Wednesday that Huang had a second affair with an Nvidia executive who reports to him.

“The old Jensen, the black leather jacket, the Godfather of AI, the rock star viewed as the face of the AI boom, is over and in the past; his value to the company pre and post this week is dramatically different, and the board did what we said it needed to do, which is rip off the band-aid and take Nvidia into its next chapter without him after this dark moment for Jensen and Nvidia,” wrote Dan Ives, partner and senior managing director at Yorkville Ives & Co.

Nvidia is now valued at more than US$4 trillion and has been a major driver in the technology sector. It is one of the reasons the tech heavy Nasdaq Composite index raced higher for most of this year and also part of the reason the index has slumped seven per cent in the past month.

As the crisis unfolded at Nvidia, shares of rivals like AMD, Advanced Micro Devices, and Broadcom have moved sharply higher.

CoreWeave, however slid more than seven per cent. Nvidia owns a stake of approximately 13 per cent in the a data centre and cloud company.

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