Axios

Nvidia has begun searching for a permanent replacement for longtime CEO Jensen Huang, who resigned Thursday amid scrutiny over reports of multiple extramarital affairs.

Why it matters: Nvidia's next leader will inherit one of the world's most valuable companies — and the daunting task of succeeding the pioneer who transformed it into an AI powerhouse.

Jensen Huang's self-destruction has left a trail of collateral damage that threatens to ensnare the board of Nvidia and the AI boom itself.

Why it matters: Huang was a singular leader in the global economy, capable of exciting or calming markets with a single sentence and viewed as a virtually indestructible force behind Nvidia's rise.

President Trump is backing Apple executive chairman Tim Cook to replace tech giant Jensen Huang after Huang resigned as Nvidia CEO, though it's unclear whether he meant it as a joke.

The big picture: Trump didn't weigh in on the controversy surrounding Huang's departure following alleged affairs with a suspected Chinese spy and an Nvidia executive, instead calling Huang "a Legend" in his Truth Social post.

The White House is standing by Commerce Secretary Howard Lutnick despite a view within the administration that Lutnick delayed action to address concerns over chip smuggling to China.

Why it matters: Congress smells blood in the water following bombshell reports that U.S. national security may have been jeopardized by former Nvidia CEO Jensen Huang's relationship with a suspected Chinese spy.

Nvidia CFO Colette Kress was named interim CEO Thursday after longtime leader and AI architect Jensen Huang resigned.

Why it matters: Kress takes over as Nvidia's shares plunge and investors question whether the AI chip giant can maintain its momentum without Huang, the only CEO it has ever known.

Jensen Huang resigned as CEO of Nvidia after he reportedly had two affairs, including one with a purported Chinese spy.

Why it matters: It's impossible to overstate how critical Huang is to Nvidia, to the AI buildout, to the stock market and economy.

UForce, a Ukraine-founded developer of autonomous uncrewed platforms, raised $700 million in Series A funding led by Valor Equity Partners and the U.K. National Wealth Fund at a $6 billion post-money valuation.

Why it matters: This is a short-term bet on the persistence of the Ukraine-Russia war and a long-term bet on all of Europe continuing to increase its defense-tech spend.

Nvidia's sell-off deepened early Thursday after co-founder and CEO Jensen Huang resigned.

Why it matters: As the second-largest U.S. company by market capitalization, Nvidia has outsized influence over the market-cap-weighted indexes like the S&P 500 and Nasdaq 100, which serve as cornerstones for many portfolios among professionals and individual investors alike.

Huang's ouster from Nvidia has plunged the AI industry into uncharted territory — a corporate earthquake that dwarfs even the chaos unleashed by Sam Altman's firing from OpenAI in 2023.

Why it matters: Nvidia is the backbone of the global AI economy, with its chips, investments and financial guarantees sustaining an entire ecosystem of companies worth trillions of dollars.

• At the center of that vast financial flywheel has been Huang, who spent 33 years making himself synonymous with Nvidia — and Nvidia synonymous with the AI revolution.
• "This is no ordinary CEO. This is no ordinary company. This is no ordinary sector. This is no ordinary time," economist Mohamed El-Erian wrote on X, warning of contagion across the AI industry.

• Nvidia's Singapore sales appeared to disappear from its financial disclosures after the country ranked among its largest markets as recently as last summer, raising questions about changes in the company's geographic sales reporting. (The Wall Street Journal)

A veterans group is calling for a halt to new data center development on federal public lands, adding to growing opposition to the infrastructure powering the AI boom.

Why it matters: The push comes after an election in which data center development emerged as a flashpoint, raising new questions about where tech companies will be able to build.

• Veterans for Public Lands launched a national campaign yesterday to impose an immediate moratorium on new data centers on federal public lands.
• "I'm not an anti-AI person," retired Army Lt. Gen. Jeffrey Buchanan, who chairs the group, told Axios. "We just need to be smart about where we do these things."

Jensen Huang's departure from Nvidia has plunged the AI industry into uncharted territory — a corporate earthquake that dwarfs even the chaos unleashed by Sam Altman's temporary firing from OpenAI in 2023.

Why it matters: Nvidia is the backbone of the global AI economy, with its chips, investments and financial guarantees sustaining an entire ecosystem of companies worth trillions of dollars.

Nvidia CEO Jensen Huang's apparent fall from grace is a shock to a company at the core of the U.S. markets and the AI ecosystem that he did much to create.

Why it matters: CEO scandals happen at companies. Their stocks fall. But there is no other company quite like Nvidia.

• Its size, financial resources and strategic position in the AI boom have made both the chipmaker and Huang, personally, pillars of the industry that has come to drive both the stock market and the economy.

Catch up quick: Following revelations this week that Huang had admitted to an extramarital affair with a woman believed by the U.S. government to be a Chinese intelligence asset, the New York Times reported Wednesday evening that Huang also had a romantic relationship with an Nvidia executive who reports to him.

• The Wall Street Journal and other outlets are reporting that the company's board of directors was preparing to oust Huang.
• Nvidia shares plunged in the after-hours trading session.

Context: The uncertainty surrounding Huang's position comes as the AI trade is going through one of the crises of investor confidence that have periodically hammered AI shares in recent years.

• The concern this time centers on the ability of the AI build-out to continue, as rising interest rates and a saturated market curtail the sale of bonds to pay for data centers.
• Chip makers like Nvidia have been particularly hard hit by this recent AI slump. Its shares were down roughly 30% from their recent high through Wednesday's close, vaporizing nearly $1.59 trillion in shareholder wealth.
• There have been market drawdowns around AI before, says Eric Sheridan, a research analyst at Goldman Sachs, in a big new report on the investment cycle.
• "The stakes are undoubtedly higher now as we're further along in the cycle and the dollars being spent have grown considerably, which may be adding to investor skittishness."

Stunning stat: Since the end of last week, the company lost over $600 billion in market value through Wednesday's after market session.

Zoom out: Those losses will touch a lot of portfolios.

• With a market capitalization of roughly $4.18 trillion — through Wednesday's close — Nvidia is the world's second-largest publicly traded company, behind Apple, giving it significant sway in market capitalization-weighted indexes, such as the S&P 500 and the Nasdaq 100.

Yes, but: If anything, a focus on Nvidia's massive size obscures how important the company is.

• It dominates the market for the graphics processing units, or GPUs, that are the costliest input into AI data centers — about 75% of a data center's total cost, per Goldman.
• It also finances and backstops significant chunks of AI computing power.
• That means Nvidia is bankrolling a small army of AI firms: AI coding companies, data center operators, neoclouds.
• For example: Nvidia has put more than $2 billion into CoreWeave, the troubled neocloud that's seen its borrowing costs soar in recent weeks. It has equity stakes in Anthropic and OpenAI.

Follow the money: Such was Nvidia's — and Huang's — stature in the tech world that in recent years, the mere mention of a company by the Nvidia CEO could create big market winners and losers.

• In June, for example, positive comments from Huang about Marvell Technology sent the company's stock soaring nearly 33% in a single day.

State of play: Now, it's Nvidia shares that might need words of encouragement.

• On Wednesday the stock received a downgrade to "market perform" from "outperform" from Bernstein Research.
• "We admit to struggling mightily with this call, and can sympathize with the case to buy the dip," Bernstein's analysts wrote. "But our gut tells us that we probably haven't yet fully probed the depths of what might be found here; we've had enough, and prefer to watch from the sidelines."
• Morgan Stanley also removed the company from its list of "top picks" earlier in the day, after the stock had declined more than 25% since it was named top pick last month.

What's next: Whatever comes next for Nvidia, the company is likely to be in an extended period of strategic paralysis.

• "Decisions about acquisitions or investments or product roadmaps, those are the kinds of things that will now have to be paused, if — again — if this happens, all these things are going to have to pause," Gil Luria, an analyst covering Nvidia for the brokerage firm D.A. Davidson, tells Axios. "So it just slows the company down when it can't make the most important, biggest decisions."

The big picture: Huang has presided over one of the most remarkable explosions of wealth creation in market history.

• From the closing price on its first day of trading, Nvidia's total compound return with dividend reinvestment is 462,906%, according to FactSet.
• He has been at the helm of the company since he co-founded it in 1993.

The bottom line: But depending on how the situation plays out, shareholders may be about to find out what an Nvidia without its charismatic leader looks like.

York Space Systems is planning to buy an Australia-based robot maker, marking the publicly-traded U.S. company's expansion into unmanned technology.

Why it matters: Space and autonomous systems are the future of modern warfare. York wants to weave the two together.

Trusted Space, a space software company, has purchased Falcon ExoDynamics, a firm that builds technology for maneuverable satellites.

Why it matters: As the number of satellites surges, there likely won't be enough Space Force guardians to monitor and operate them all.

• Investors see autonomous software and dynamic satellites as key developments in orbital warfare.

The new Democratic congressional majority is vowing a slew of investigations into Elon Musk's business empire — potentially putting the military's vast portfolio of contracts with SpaceX under the microscope.

Why it matters: Attempts to hold Musk accountable will run up against a basic reality that for critical military and space missions, the government has no replacement for SpaceX — and likely won't for years.

Whether you're looking for sci-fi, suspense or stand-up, there are fresh streaming titles to choose from this week. Here are five to consider.

The Lord of the Rings: The Rings of Power — Season 3 available now on Prime Video

• Set long before Frodo enters the story, the prequel shows how Sauron builds the power that will threaten Middle-earth generations later.
• The latest: Simon Pegg joins the cast as the voice of the Balrog, while Jamie Campbell Bower plays Celeborn, Galadriel's husband.

The End of Oak Street — Sci-fi movie available Friday on HBO Max

• Anne Hathaway and Ewan McGregor play parents trying to keep their family alive when their 1980s suburban block suddenly lands in a world of dinosaurs.
• Behind the scenes: "It Follows" filmmaker David Robert Mitchell wrote and directed the movie, which opened in theaters in August before its streaming debut.

The Good Daughter — Limited series available Thursday on Peacock

• Sisters played by Meghann Fahy and Rose Byrne return to the Georgia town where their mother was killed two decades earlier.
• Behind the scenes: Karin Slaughter turned her own 2017 bestseller into the six-episode adaptation.

Being Heumann — Historical drama available Friday on Apple TV

• Inspired by true events, Judy Heumann (Ruth Madeley) leads disabled activists in occupying a San Francisco federal building to demand enforcement of their civil rights.
• Behind the scenes: Siân Heder wrote and directed the film after winning an Oscar for her screenplay for Best Picture winner "CODA."

Janelle James: How Romantic — Stand-up special available now on Netflix

• The "Abbott Elementary" star talks about relationships, money and the social rules she wants to challenge.
• Catch up quick: James previously appeared on Netflix's "The Comedy Lineup" and "The Standups," but "How Romantic" is her first full-hour showcase.

Go deeper: See last week's picks.