Nvidia shares fell sharply on Thursday after co-founder Jensen Huang stepped down as chief executive, raising questions about the future leadership of the world’s most influential artificial intelligence chipmaker and the wider AI industry.
The company’s shares dropped more than 13% at the opening of US trading before recovering some of their losses. They were down approximately 7% shortly afterwards as investors reacted to the unexpected leadership change and its possible consequences for Nvidia’s business.
According to the company’s board, Huang had stepped down as president, chief executive and board member with immediate effect. Chief Financial Officer Colette Kress was appointed interim CEO while continuing in her finance position. The board said it would consider both internal and external candidates to find a permanent replacement.
The leadership change followed reports concerning two alleged extramarital affairs involving Huang, including one with a woman whom US authorities reportedly suspect of spying for China. The reports prompted Nvidia’s board to meet late on Wednesday in the United States to consider removing the long-serving executive.
The market reaction quickly extended beyond Nvidia. The company’s share price decline weighed on the wider US stock market, with technology companies among the biggest losers. The S&P 500 fell 0.7% on Thursday, while the Nasdaq Composite dropped 1.5%. The Dow Jones Industrial Average moved in the opposite direction, gaining 127 points.
Nvidia has been at the centre of the global artificial intelligence boom, supplying the advanced processors used to train and operate many of the world’s leading AI systems. Under Huang’s leadership, the company grew from a chipmaker founded in 1993 into one of the most valuable businesses in the world, with a market capitalisation exceeding $4 trillion at Wednesday’s close.
That position has also made Huang one of the most influential figures in the technology industry. His departure raises questions about whether Nvidia can maintain its current direction and influence as demand for artificial intelligence infrastructure continues to shape investment decisions across global markets.
The company has already lost nearly $600 billion in market value since reports about Huang’s alleged relationship with a woman suspected of spying for China emerged. Further losses remain possible as investors assess the implications of the leadership crisis.
Ben Barringer, head of technology research at Quilter Cheviot, described the development as significant for financial markets because of Huang’s influence and the scale of Nvidia’s growth under his leadership.
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Barringer identified Kress as the most obvious internal candidate for the permanent position, noting her extensive knowledge of the company and involvement in developing its business strategy. He suggested that her time as interim CEO would provide an opportunity to demonstrate whether she could take on the role permanently.
Despite the immediate market reaction, Barringer does not expect a short-term disruption to Nvidia’s operations if the company maintains its strong order book and continues meeting its performance targets.
However, he warned that Huang’s departure could have consequences beyond Nvidia itself. The executive has played an important role in discussions about AI regulation, investment and financing, helping establish the company as a central force in the development of the wider artificial intelligence industry.
Without his presence, Nvidia could gradually lose some of the influence it has built among technology companies, investors and policymakers. Any future change in corporate strategy could also affect businesses that depend on its processors and investment in AI infrastructure.
Before the board’s decision became public, Dan Ives, partner and senior managing director at Yorkville Ives & Co., had warned that Nvidia could lose a quarter of its market valuation if Huang left the company. His assessment reflected the importance investors attach to the founder’s leadership and the uncertainty surrounding a possible succession.
The developments also affected Nvidia’s competitors. Shares in Advanced Micro Devices (AMD) and Broadcom rose sharply as investors considered how a leadership change at Nvidia might affect competition in the semiconductor market.
Cloud and data centre company CoreWeave moved in the opposite direction, with its shares falling nearly 9%. Nvidia owns approximately 13% of the company, making the two businesses financially connected.
European semiconductor companies also experienced selling pressure as concerns spread across the global AI supply chain. In early afternoon trading on Thursday, ASML shares fell 2.8% in Amsterdam, while ASM International declined 0.7% and STMicroelectronics dropped 1.7% in Paris.
The broader European stock markets were more resilient. By 15:00 CET, Germany’s DAX was up 0.3%, having retreated from earlier gains after crossing 27,000 points for the first time. Siemens shares had risen more than 4% following the company’s report of record profits, supported partly by demand from data centres. London’s FTSE 100 was also slightly higher, while France’s CAC 40 gained 0.4% by mid-afternoon.
Elsewhere in the financial markets, oil prices recovered from earlier losses after US President Donald Trump said the United States did not need a deal with Iran. At 14:31 CET, Brent crude futures were trading 1.23% higher at $93.90 a barrel, while US West Texas Intermediate futures gained 0.81% to $87.23.
Brent crude had traded between $72 and $120 a barrel since the war involving Iran pushed energy prices higher, leaving oil markets sensitive to developments in the region and statements from political leaders.
Gold prices moved lower during the session. US gold futures for December delivery fell 1.1% to $3,954.50 an ounce at 12:14 CET, as a stronger US dollar and expectations of further Federal Reserve interest rate increases weighed on the precious metal.
In currency markets, the dollar edged down 0.04% against the Japanese yen to 159.71 yen, while the euro slipped 0.03% against the dollar to $1.1086.
For investors, Nvidia’s leadership change represents more than the departure of a company founder. The semiconductor giant has become central to the expansion of artificial intelligence, and its decisions influence businesses across the technology sector. The immediate challenge for its board is to establish confidence in the next leadership team while reassuring investors that the strategy behind Nvidia’s growth remains intact.
