Nvidia falls 7% as board reportedly weighs Huang’s future, unsettling AI investors

Nvidia’s leadership uncertainty spread across AI stocks on November 12, with shares down 7% before the U.S. market opened. Reuters reported that directors were considering CEO Jensen Huang’s future. Investors’ concern reaches beyond who runs the chipmaker: some fear a successor could pull back from financing the customers building the AI boom.

Reuters said Nvidia’s board was meeting late Wednesday, November 11, to consider Huang’s position following reports of two alleged extramarital affairs. No departure had been confirmed. The immediate market reaction nevertheless reached companies that buy Nvidia’s chips, receive its financial backing or compete against it.

Customers slide while some rivals gain

Nvidia had fallen about 8% in after-hours trading before the 7% premarket decline reported Thursday. Those figures describe different trading snapshots, not two losses to add together. At 4:11 a.m. Eastern time, Nasdaq 100 futures were down 0.79%, compared with a 0.38% decline for S&P 500 futures.

• AI infrastructure providers CoreWeave and Nebius fell 7.2% and 4.7%, respectively, in the Thursday premarket selloff.
• Chipmakers Intel, Marvell Technology and Micron dropped between 2.6% and 3.4%, extending the weakness beyond Nvidia’s direct customers.
• Broadcom and AMD rose in the initial reaction described by Reuters, while Chinese chipmakers Moore Threads, MetaX and Cambricon each jumped nearly 10% Thursday.

Reuters linked the Chinese suppliers’ rally to expectations that turmoil at Nvidia could help them win market share. That competitive reading contrasts with the concern among investors in Nvidia-backed businesses: a leadership change might affect not just which chips customers buy, but how their projects get funded.

The financing concern extends beyond chip sales

Nvidia has invested billions in customers through equity stakes and other financial promises, Reuters reported. Its latest earnings report listed about $164.5 billion in financial commitments. That included an obligation capped at $105 billion for an OpenAI data center in Ohio, alongside lease and other capacity guarantees exceeding $50 billion.

The relationship with South Korea’s Naver illustrates that role. Nvidia took a $1 billion stake while financing a data-center expansion, according to Reuters. Naver shares dropped nearly 6%. CoreWeave, another Nvidia-backed operator, also fell after hours, despite having rallied earlier Wednesday on upbeat earnings.

Jun Bei Liu, lead portfolio manager at Sydney fund manager Ten Cap, told Reuters the uncertainty extends to businesses Nvidia co-invests in and sponsors. Her concern was whether the company’s willingness to finance the buildout would survive a change at the top.

He's the face of Nvidia and Nvidia has been front and centre of the AI build-out

Jun Bei Liu, lead portfolio manager at Ten Cap, speaking to Reuters

Chip demand offers a different case

Other investors separated Nvidia’s products from its chief executive. Anna Wu, founder of Floodlines Research, argued that its advanced graphics processing units—the chips used for AI computing—still have no real substitute. In her view, demand for that hardware, rather than one individual, underpins the AI trade.

Shay Boloor, chief market strategist at Futurum Equities, drew a distinction between near-term sales and longer-term direction. He did not expect the next 12 to 18 months of revenue to disappear if Huang left. His bigger concern was replacing Huang’s ability to anticipate where computing would go over the next decade.

Strategy Asset Managers CEO Tom Hulick offered a more bullish assessment, telling Reuters his firm did not see AI capital spending slowing and that the correction could offer a buying opportunity. Nvidia’s earnings next week will provide the next scheduled checkpoint for its sales outlook, leadership and financing strategy.