Jensen Huang's exit leaves Nvidia's chips on track but its next big deals in doubt

Jensen Huang has resigned as chief executive of Nvidia, effective immediately, the company's board announced Thursday. The move ends a 33-year run at the chipmaker he co-founded in 1993 and built into the world's most valuable company. Chief Financial Officer Colette Kress is now interim CEO while Nvidia looks for a permanent replacement.

The resignation came at the end of a week of reports about Huang's personal relationships. The first concerned Alice Huang, an executive at Megaspeed who is suspected of being an asset of China's Ministry of State Security. Huang acknowledged that affair in a written message to Nvidia staff. On Wednesday, The New York Times reported that he had also had an affair with an Nvidia vice president. Hours after Thursday's announcement, Reuters reported an "intimate relationship" with another employee.

Several important questions are still open. Neither government authorities nor Nvidia's board has formally accused Huang of wrongdoing in his dealings with Alice Huang, and China has denied that she is a spy. The board said it does not believe Huang compromised any secrets, but it has hired the law firm Wachtell Lipton to investigate. The president said Tuesday that the FBI "is looking into it."

Investors have already reacted. Between the Huang reports and broader worries about an AI bubble, Nvidia shares fell in recent days to their lowest level in more than a year. The company reports quarterly earnings next week, which gives Kress very little time before her first public test as its leader.

Why the chip pipeline looks safe for now

The case for calm starts with Nvidia's market position. The company controls roughly 90% of the market for graphics processing units, the chips used to train and run AI models. Analysts who follow Nvidia say that lead will not disappear just because Huang has left.

Dan Ives, a tech analyst at Yorkville Ives and Co., called the resignation "a gut punch to the industry" in comments to CBS News. In a note to investors, though, he argued that Nvidia's product plans are already set around a new family of chips and that global demand remains strong. "They are roughly 2-3 years ahead of the nearest competitor," he wrote.

Cody Acree, an equity research analyst at StoneX, expects limited operational fallout over the next year or two. "Everything is already designed, planned, booked, and scheduled for production and delivery well into 2028," he told CBS News.

That argument holds up for hardware. Chips that reach customers in 2027 were designed and ordered long before this week, and a new CEO can't quickly change them, even if one wanted to. The hard part of Huang's job was never just shipping the next GPU.

The dealmaker Nvidia just lost

What set Huang apart was his ability to create demand and lock in supply through deals. William Blair & Co. analyst Sebastien Naji described that strength in a report. Huang financed major customers, including a February agreement to invest $30 billion in ChatGPT developer OpenAI, which buys Nvidia hardware. On the supply side, Naji wrote, Huang secured priority access to memory, wafers and optics through prepayments, multiyear purchase agreements and equity stakes in suppliers.

"While existing contracts will survive a CEO change, what's at risk is the next round of deals," Naji wrote. He added that a company distracted by an investigation or a succession search could give rivals such as AMD and Broadcom room to win more market share than they had planned.

This looks like the most serious business risk. Nvidia's recent lead has depended on bold financing deals that a founder can push through on personal credibility, and an interim CEO usually cannot. Kress has run the company's finances for years, so she knows these deals in detail. Signing off on the next one without a permanent mandate is a different matter.

The same worry is spreading through the startup world. The chief executive of one AI company, speaking anonymously to WIRED, said Nvidia's habit of funding startups and buying companies has helped keep chip demand high. According to that executive, a conventional replacement CEO would stop doing that, and "systemic risk for the AI trade and AI bubble increases substantially." That is one person's prediction, not a forecast from Nvidia, but it explains why a leadership change at a single company is unsettling the whole AI sector.

Open-source AI bets now depend on Kress

Huang's open-source commitments may be the most exposed. Nvidia agreed to buy model-hosting platform Hugging Face for $13 billion, but that deal has not been finalized. The company also agreed to pay $6 billion for a non-exclusive license to technology from Poolside, an AI coding startup that releases its work openly.

Under Huang, Nvidia built Nemotron, a family of open-weight models designed for long-running AI agents and reasoning tasks. It also invested in startups such as Reflection AI and Thinking Machines Lab. Earlier this year, Huang wrote an open letter, signed by 25 companies including Microsoft, Meta, IBM and Palantir, urging Washington not to over-restrict open-weight AI models.

An Nvidia insider told TechCrunch they do not expect the leadership change to affect Nemotron development. It is less clear how Kress will handle the Hugging Face purchase. TechCrunch said it contacted Nvidia for comment.

Nvidia's support for open models has always had a business logic. Big customers such as Google and OpenAI are designing their own chips, so a large pool of smaller developers training and running their own models protects Nvidia's sales. That reasoning still applies without Huang. The risk is that a cautious interim leader treats a $13 billion acquisition as something to pause until a permanent CEO arrives. Hugging Face CEO Clem Delangue responded on X that his company would keep "fighting for open-source AI, harder than ever," whatever happens.

Loyalty inside Nvidia and support from tech leaders

Inside Nvidia, the first reaction was largely to keep working. Two current and three former employees told WIRED that staff trusted the board to investigate and that few expected Huang to actually leave. Nvidia has about 60,000 employees and reportedly one of the lowest turnover rates in tech. Workers credited Huang with keeping layoffs rare and bureaucracy light.

"In just three days we went from superhero cape to 'Oops, I forgot my pants,'" one employee told WIRED.

Prominent figures in the tech industry have defended Huang publicly. Venture capitalist Antonio Gracias wrote on X: "One mistake does not erase a lifetime of leadership and contribution in building NVDA." Investor Sarah Guo posted after the resignation that a founder with Huang's record had earned the presumption that he should keep leading. Ruby on Rails creator David Heinemeier Hansson had argued that Nvidia would be wrong to fire Huang, and after the resignation he replied, "What a waste." Elon Musk said in a reply on X that it would "be an honor" to hire Huang.

Much of that support was posted before Reuters reported the second relationship with an employee, and it reads mostly as loyalty to a founder rather than a judgment about governance. Nvidia's board faces a narrower question: who can keep the company's supplier and customer relationships intact while a law firm examines how its longtime leader handled his ties to a suspected intelligence asset.

Next week's earnings report should give the first indication of how well that is going. Investors will be watching less for the quarter's results, which were largely set months ago, than for anything Kress says about the Hugging Face deal, future investments and the search for a permanent CEO.