Summary Bullets:

• Nvidia’s CEO, Jensen Huang, resigned on November 12, and was replaced by Colette Kress, executive vice president (EVP) and chief financial officer (CFO).
• Nvidia’s stock plunged after the news, and Huang will appear before the US Congress to discuss whether US national security was compromised, following an affair with an alleged spy.

To say that the news of Nvidia’s CEO Jensen Huang resignation, after several alleged affairs came to light, has shaken the industry may come across as an understatement. Since generative AI began disrupting the world in late 2022, he has been arguably the most visible figurehead in the industry, leading one of the world’s most valuable companies behind the proverbial picks and shovels of the AI gold rush. After his resignation, EVP & CFO Colette Kress, was appointed as interim CEO. Huang has agreed to appear before the US Congress to discuss whether US national security was compromised, following the scandal that led to his resignation. He was involved with Alice Huang, an executive at the Singaporean firm Megaspeed accused of having ties with Chinese intelligence, at a time when Jensen Huang had significant influence over US AI policy, including decisions over semiconductor exports and bans. The allegations remain unproven.

Nvidia’s stock plunged upon the news, and the company’s value sank by around $1.6 trillion. It is interesting that this comes at a pivotal time for the AI industry, which means the resignation can also carry a certain symbolic weight, reflective of the excess and exuberance of the AI revolution. In this sense, this is more a full-blown governance crisis than a cataclysmic technological event. It creates uncertainty and execution risks at a crucial time for its Vera Rubin roadmap, but the company’s technological advantages, ecosystem, engineering talent and customer relationships will still be there next week.

Nvidia’s dominance was already slowly being chipped away at by the emergence of niche players as well as traditional GPU competitors like AMD. AMD will be one of the main beneficiaries of this crisis, alongside Broadcom, Google, and Amazon, hyperscalers with their own proprietary semiconductor technology. Technology rivals have been making substantial efforts to accelerate the supply of chips that are so highly strategic to the AI value chain. Even Meta and Microsoft are now designing their proprietary silicon as well as AI labs such as OpenAI, which also produces custom semiconductors in conjunction with Broadcom.

However, Nvidia has a massive installed base resting on its CUDA ecosystem, with an 18-year heritage and pervasive ecosystem of libraries, APIs, and languages beloved by developers. Huang’s resignation is not going to change that, although the timing is particularly unfortunate because the company is set to report its third-quarter fiscal 2027 financial results next week (November 17). The real competitive threat is not that Nvidia suddenly loses its competitive advantage but that customers become less willing to depend on a single supplier. The hyperscalers want to reduce their dependency on Nvidia.. The uncertainty over the company could lead to pricing pressures, as the rise of agentic AI shifts demand towards alternative processor architectures with inference workloads taking center stage over training. However, this impact won’t be felt for awhile yet, because the company’s hardware roadmap is already established in the short term. Although the impact will be felt more keenly from 2028 onwards, the immediate fallout has been massive.