Jensen Huang resigned, and NVIDIA's stock plummeted 10% in pre-market trading

Author: Shuqing Bu, Wall Street Journal

NVIDIA's CEO Jensen Huang has been forced to resign due to an extramarital affair scandal. This shocking personnel change in the tech industry not only leaves one of the world's most valuable companies in a leadership vacuum but also raises deep concerns about the overall stability of the artificial intelligence industry.

On Thursday local time, NVIDIA announced that Chief Financial Officer Colette Kress has been appointed as interim CEO, and the company also appointed Harvey Jones as the first chairman of the board. NVIDIA stated that it will consider both internal and external candidates for the CEO position and noted that Jensen Huang's contributions to the company "are immense."

Following the announcement, NVIDIA's stock price in pre-market trading quickly fell by about 10%. Given Huang's long-standing leadership in NVIDIA's large-scale investments and endorsements in the external AI ecosystem, the chain reaction triggered by his departure may extend far beyond the stock price fluctuations of a single company.

Scandal Ferments, Founder Exits Abruptly

Jensen Huang is one of the three engineers who founded NVIDIA in 1993 and has been the company's only CEO since its inception.

The catalyst for this crisis was Huang's admission of two extramarital affairs. Subsequently, public pressure escalated sharply, ultimately leading to his resignation.

The depth of NVIDIA's crisis partly stems from the company's own governance flaws—this tech giant, which once surpassed a market value of $5 trillion, has never established a clear succession plan. The 63-year-old Huang has concentrated management of the company heavily on himself, creating a strong "key person dependency" risk.

"As an economic history researcher, I am not sure if there has ever been such a key figure in history who single-handedly supported so much of an entire industry," said Thomas Ferguson, an investor at Blue Bear Capital, at the BNEF Houston Summit on the eve of Huang's departure.

Successor Kress: Financial Expert, Leadership Experience in Question

Colette Kress, who is temporarily taking over as CEO, joined NVIDIA 13 years ago from Microsoft and Cisco, and has always focused on the finance sector throughout her career. She has represented the company at Wall Street-related events, but her public role has long been limited to financial data, with most communications with the capital markets previously led by Huang.

The market remains cautious about whether Kress can fill the strategic and public relations vacuum left by Huang. NVIDIA stated it will look for both internal and external candidates, but the uncertainty of the succession transition itself poses a direct test of investor confidence.

An AI Ecosystem Supported by One Person Faces Sudden Pressure

Jensen Huang's influence has long extended beyond NVIDIA itself.

With the company's financial strength, he provided funding support to cutting-edge AI labs such as OpenAI and Anthropic, and deeply engaged with cloud computing companies like CoreWeave through investments and financing endorsements, thereby building an AI industry ecosystem centered around NVIDIA.

However, the robustness of this ecosystem has come under scrutiny in recent years. According to previous reports by Bloomberg, well-known Wall Street investors like Michael Burry, the prototype of "The Big Short," have warned that related circular trading arrangements are artificially amplifying AI demand, posing a bubble risk.

Since NVIDIA went public in 1999, its stock price has increased by over 700,000%, and the wealth created is said to have surpassed the historical achievements of Apple's Steve Jobs, Microsoft's Bill Gates, and Amazon's Jeff Bezos. Now, with the sudden departure of the core creator behind this extraordinary growth, how NVIDIA and the entire AI industry will fill this void remains to be seen by the market.