Nvidia shares slide as rivals surge on supply chain concerns
Analysts argue that the departure of CEO Jensen Huang could break Nvidia’s monopoly, forcing customers to diversify suppliers and reshaping the AI chip market.
By Lorenzo Marshall ·
CoreWeave stock dropped nearly 7% on Thursday, a sharp decline that signals growing anxiety among firms heavily dependent on Nvidia hardware. The drop occurred immediately after reports surfaced that Nvidia CEO Jensen Huang had resigned. The resignation followed news of extramarital affairs, including a relationship with a suspected Chinese spy.
Huang had been the primary public figure for the chip giant. In March, he projected that Nvidia would manage a $1 trillion backlog in chip orders by the end of the year. That figure was double his estimate from the previous year. Nvidia currently trades as one of the most valuable companies on Wall Street, rivaling Apple. The company has also invested heavily in other AI firms, creating a dense network of financial and technological dependencies.
Rival chipmakers reacted differently to the news. Shares for Broadcom, Intel, and Advanced Micro Devices advanced on Thursday. Investors expected that Nvidia customers would begin to diversify their supplier bases. Bret Greenstein, chief AI officer at West Monroe, described the shift as a move from a monopoly to a competitive race. He noted that Nvidia did not create the underlying demand for chips, and that a more diversified supply chain could strengthen the broader AI industry.
Nvidia built its market position by adapting graphics processing units from video games to AI training. Competitors such as AMD, Intel, and cloud providers like Google, Amazon, and Microsoft have long tried to close the performance gap. Jay Aldebert, chief growth officer of International Services Inc., observed that Nvidia has a habit of releasing superior chips as soon as rivals match its technology. He stated that no competitor is sitting still.
Despite the gains for rivals, the market impact may not be symmetric. Chester Spatt, a finance professor at Carnegie Mellon University, argued that the price gains for competitors will be smaller than Nvidia’s losses. He also predicted that buyers will become more reluctant to concentrate their purchases with a single source. This shift could force a reevaluation of circular financing practices, which Aldebert described as incestuous.
The resignation also has geopolitical implications. Elected officials may push for stronger export controls on American-made chips. Such measures could benefit Huawei, a Chinese chipmaker. Lizzi C. Lee, a fellow at the Asia Society Policy Institute, said Chinese AI firms might accelerate efforts to secure overseas computing capacity. She noted that while Chinese chipmakers have rallied on the news, China’s AI developers still depend heavily on Nvidia’s ecosystem.
Huang’s role extended beyond product development. He served as a political advocate with close access to President Donald Trump and officials in Beijing. His departure creates uncertainty for pending public offerings, including Anthropic’s IPO, which is valued at $1.3 trillion. Colette Kress, Nvidia’s CFO and interim CEO, will now lead the company. She was a key architect of Nvidia’s partnership strategy, which is now under closer scrutiny.
The incident coincides with midterm elections that saw increased hostility toward data centers. Many incoming Democrats have promised aggressive stances on AI regulation. Asa Hiken, a senior analyst at eMarketer, called the resignation a watershed moment. She said Nvidia must now prove it can maintain its AI dominance without the leader who built its current structure. The ripple effects will be felt across the entire AI ecosystem.
