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Investors worry the AI trade needs Nvidia's Huang and its largesse

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Investors worry the AI trade needs Nvidia's Huang and its largesse

Business News Tech AI Investors worry the AI trade needs Nvidia's Huang and its largesse

Nvidia's shares fell 8% following concerns about CEO Jensen Huang's leadership amidst personal controversies. Investors fear his potential ouster may impact the company's support for AI developments and market strategies. Chipmakers across Asia also experienced declines due to funding risks and demand outlook fears. Despite uncertainties, analysts believe Nvidia's core technology will remain central to AI market growth.

Investors fear an ouster of CEO Jensen Huang might dampen Nvidia 's willingness to bankroll the AI boom, in yet another pressure point on the global markets' most crowded trade. The board of the world's dominant chipmaker, at the cutting edge of computing, was meeting late Wednesday to decide Huang's fate as it grapples with reports of two extramarital affairs involving its longtime leader. Traders' first reaction was to punish Nvidia shares and those of its customers, including data-centre firms CoreWeave and Naver , while pushing shares of chipmaking rivals Broadcom and AMD higher.

Shares in China's leading makers of graphics processing units (GPUs) surged on Thursday, as mounting turmoil at Nvidia boosted expectations that local chip suppliers could win greater market share. Moore Threads, MetaX and Cambricon all jumped nearly 10%. But the worry in the market is that the stakes are far higher and that if Nvidia - under a different leader - backs away from a strategy of financing data centres, then the AI boom itself loses momentum. "He's the face of Nvidia and Nvidia has been front and centre of the AI build-out," said Jun Bei Liu, lead portfolio manager at Ten Cap, a fund manager in Sydney.


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