Jensen Huang resigns from Nvidia as Bitcoin falls to $71,000

Nvidia co-founder Jensen Huang resigned on Thursday, prompting a sharp decline in Nvidia shares and worsening a cryptocurrency selloff. Nvidia announced on Nov. 12 that Huang had immediately left the positions of chief executive, president and board member. Huang's departure ended 33 years of leadership at Nvidia. Chief Financial Officer Colette Kress became interim CEO during Nvidia's search for a permanent successor. Longtime director Harvey Jones, a former Synopsys executive, will become board chairman.

Nvidia gave no reason for Huang's resignation. However, Huang's departure followed reports alleging extramarital relationships, including a relationship with a woman whom US authorities suspected of connections to Chinese intelligence. Nvidia's board had commissioned an independent investigation into the allegations, which remain unproven.

Nvidia shares lost as much as 10% in premarket trading, reaching approximately $156. That price would imply a market capitalization of roughly $3.8 trillion, nearly $2 trillion below the October peak of approximately $5.8 trillion. CryptoQuant CEO Ki Young Ju said analyst sentiment toward Nvidia stock had reached -2.6σ, the most bearish reading on record. Shares in Nvidia-backed AI infrastructure companies also declined. CoreWeave lost more than 13% in premarket trading. Nebius fell about 20% amid worries about the company's growth prospects.

Bitcoin dropped to $71,000. CryptoSlate data showed Bitcoin below $71,500 and Ethereum below $1,990, with both cryptocurrencies reaching their lowest prices since August. Nvidia's central position in AI investment helps explain the market response. Huang oversaw Nvidia's dominance in advanced processors and a growing network of financing arrangements supporting buyers of those processors.

The leadership upheaval renewed concerns about circular investment arrangements linking chip suppliers, cloud operators and AI developers. Coin Bureau chief executive Nic Puckrin warned that replacing Huang could harm the wider AI industry because Huang played a central role in negotiating financing agreements. Puckrin questioned whether a successor could reproduce those arrangements. Puckrin also questioned whether uncertainty about Nvidia's direction could weaken confidence in the sector's investment model.

AI companies increasingly invest in businesses that also buy the investing companies' products and services, attracting greater scrutiny of circular financing. An October study from the Bank for International Settlements attributed 55.2% of incoming AI-company investment value during 2021 to 2025 to other AI businesses. The study found that 46.4% of that AI-to-AI investment value involved investors with commercial relationships with the recipients. The study put those investments at approximately 25.6% of all incoming investment value.

Nvidia invested $2 billion in CoreWeave in January. CoreWeave supplies cloud infrastructure and buys Nvidia processors. An accompanying agreement sought to speed CoreWeave's construction of AI data centers, strengthening Nvidia's financial ties with a major customer.

Such arrangements have prompted comparisons with equipment manufacturers financing network operators' equipment purchases during the late-1990s telecommunications boom. The later collapse in demand left suppliers facing lower sales and losses on financing commitments. Huang's resignation leaves Nvidia's existing contracts unchanged. However, Huang's successor will take over an increasingly interconnected investment network that depends on sustained growth in demand for AI computing. Nvidia's Nov. 17 earnings call will let investors assess whether the transition changes Nvidia's approach to customer financing and infrastructure expansion.