Global AI-linked stocks tumbled on Nov 12 as Nvidia CEO Jensen Huang resigned following a deepening scandal around his affairs, upending the chipmaker’s leadership and posing fresh risks to a sector already reeling with funding and regulatory concerns.

Chief financial officer Colette Kress will take over as interim CEO as Nvidia looks for a permanent successor, the company said.

As the centrepiece of the AI ecosystem, the chipmaker finances infrastructure built around its chips – a strategy that has drawn scrutiny over circular funding and now risks weighing on the sector as its crisis deepens.

Nvidia’s shares fell 8.2% to a more than 16-month low in early trading and its market value was on track to close below US$4 trillion (S$5.14 trillion) for the first time since July 2025.

“Nvidia has been called the ‘Bank of AI’. If they have to take a step back because of what’s going on, will that cut off funding to smaller companies that need it? That’s an open question,” said Joe Saluzzi, partner and co-head of equity trading at Themis Trading.

Nvidia-backed neocloud firms CoreWeave dropped 9.1% after surging more than 27% in the previous session when its earnings ignited a relief rally in AI stocks.

Other neocloud stocks including IREN and Applied Digital were also trading lower. Nebius dropped 16.2% after the company said its 2026 revenue would come in at the low end of its previous forecast.

Nvidia has lost about US$550 billion in market value since the board announced an investigation on Nov 8 into Huang’s relationship with a businesswoman called Alice Huang, who is alleged to be a Chinese spy.

“The interlocking deals that Nvidia has with so much of the industry raises the question of whether that created more stability or more fragility. We’re going to find out over the next few weeks as this whole situation unravels,” said Steve Sosnick, chief market analyst at Interactive Brokers.

Nvidia short sellers have made US$9.6 billion in on-paper profits so far this week, according to data analytics firm ORTEX.

AI sell-off continues after brief respite

Chipmakers, widely viewed as one of the biggest beneficiaries of the AI boom, led the sell-off, with the Philadelphia chips index sliding 1.3%.

Marvell Technology, which Huang called as the “next trillion-dollar company” in June, slumped 3.8%.

AI hyperscaler Oracle, which is expanding its cloud AI chip deals with Nvidia, shed 2.6%.

Memory chipmaker Micron Technology fell 2.5% and data storage firms Sandisk and Western Digital eased 6% and 3.7%. Photonic product makers Lumentum and Coherent and AI server maker Dell eased between 3% and 5.1%.

Construction and power-generation equipment maker Caterpillar and power producer Vistra slipped about 0.5% each.

Shares of AMD and Broadcom, which also produce AI chips and compete with Nvidia, however, rose 3.7% and 5.6%, respectively, on expectations that the turmoil at Nvidia could create opportunity for rivals.

Other hyperscalers including Alphabet, Amazon.com and Microsoft were also up between 0.8% and 2.7%.

AI stocks struggled and the Nasdaq entered a technical correction earlier in November after the Democrats swept the US midterm elections, including in states opposed to data centres, stoking fears tighter regulation could slow the AI build-out.

Tech-heavy stock markets across the globe witnessed jitters. Japan and South Korea closed nearly 0.7% lower. Tech stocks in Europe were also down about 1%.

Nvidia trades at about 12 times its 12-month forward earnings estimates, its lowest since November 2012, according to data compiled by LSEG. REUTERS