Huang’s exit could send ripples through AI investments and US-China tech rivalry

Jensen Huang’s resignation as CEO of Nvidia, which he has led for 33 years, is expected to signify much more than the downfall of a high-profile corporate executive. It could reverberate across the global artificial intelligence industry and reshape the broader technology rivalry between the US and China.

Nvidia, where key business decisions and external relationships were heavily concentrated in Huang’s hands, now faces the formidable task of establishing a succession plan. His departure casts uncertainty over the hundreds of billions of dollars in AI investment and the financing ecosystem that he helped build, while adding a new variable to US semiconductor export policy toward China and trade negotiations between the two countries. 

The decisive factor behind Huang’s resignation in the early hours of Thursday (US time), as he faced the prospect of being ousted, was an allegation of a second extramarital affair with a subordinate at his own company.

On Sunday, Nvidia’s board of directors expressed confidence in Huang, who had acknowledged an affair with a woman suspected of having ties to Chinese intelligence agencies, while launching an independent investigation. But the situation shifted dramatically on Wednesday, when reports emerged of a separate relationship with Kimberly Powell, Nvidia’s vice president of healthcare.

As Powell reported directly to Huang, the relationship inevitably raised legal and ethical questions, including the possibility of preferential treatment in personnel and performance evaluations, as well as potential abuses of power arising from the hierarchical relationship. 

He will be succeeded by Nvidia CFO Colette Kress, who appears to have been chosen as interim CEO to reflect the company’s desire to minimize market disruption. Before joining Nvidia in 2013, Kress spent 25 years working in the finance departments of major technology companies, including Microsoft and Cisco, and has since overseen Nvidia’s finances. 

In a previous interview, Kress looked back on her first day at Nvidia, reminiscing about how it was the smallest company she had ever worked for. She has addressed investors together with Huang, appearing alongside him at every quarterly earnings announcement. 
Her familiarity with the market makes her a suitable choice for maintaining short-term stability. However, it remains to be seen if she will be able to fill Huang’s shoes when engaging with the technological, business and political relationships he cultivated.

The crisis at Nvidia could spill over into the global AI industry. Nvidia has supplied companies such as Microsoft, Amazon and Google with state-of-the-art semiconductors while also investing in and aiding AI startups and data center operators to secure funding. 

The company has become central to this circular financing model, in which a company invests in or provides financing to customers who buy its AI chips. If Nvidia, which has been described as the central bank of the AI industry, scales back its investments and purchase commitments, data center companies could face a chain reaction of financing difficulties, potentially disrupting the construction of AI infrastructure. 

Huang’s departure does not necessarily spell the end of Nvidia’s technological dominance. The company has plans to develop Blackwell and Rubin, its next-generation AI chips, while demand for advanced AI processors remains strong. Nevertheless, the aggressive investment and deal-making structure built on Huang’s personal negotiating power and connections may inevitably undergo adjustments. 

Even after stepping down as CEO, Huang’s troubles are only starting. The FBI is conducting a probe to investigate allegations regarding Huang’s ties to Chinese spy agencies, and Republican lawmakers leading the House committees on foreign affairs, relationship with China, and intelligence are demanding that he attend a closed-door joint briefing on Nov. 18. If Huang does not acquiesce, they warn that they will issue a subpoena. 

A class-action lawsuit filed by shareholders, who allege that he misled investors by concealing his extramarital affairs, is another source of pressure on the former CEO.  

This incident has also exposed contradictions in the Donald Trump administration’s China policy on technology. The Washington Post pointed out that Trump has characterized China’s advances in AI as a national security threat, yet allowed some exports of advanced semiconductors to China and maintained close ties with Huang even after being briefed on his relationship with a suspected Chinese spy.

Huang has long insisted on lifting restrictions on China, arguing that selling US-manufactured semiconductors would increase China’s dependence on US technology. Michael Deng, a geoeconomics technology analyst at Bloomberg Economics, said that Huang’s departure would weaken the industry’s most influential voice opposing tighter export controls on China. 

The immediate test will come at next week’s Asia-Pacific Economic Cooperation summit in Shenzhen, China. If the scandal fuels growing momentum in the US Congress to tighten semiconductor export controls, it could also complicate negotiations between Washington and Beijing.