KUALA LUMPUR, Nov 12 (Reuters) -- Global AI-linked stocks tumbled on Thursday as Nvidia Chief Executive Officer (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, Reuters reported.
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 per cent to a more than 16-month low in early trading, and its market value was on track to close below US$4 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 partner and co-head of equity trading at Themis Trading, Joe Saluzzi.
Nvidia-backed neocloud firm CoreWeave dropped 9.1 per cent after surging more than 27 per cent 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 per cent after the company said its 2026 revenue would come in at the low end of its previous forecast.
Nvidia has lost more than US$550 billion in market value since the board announced an investigation on Sunday 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 raise 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 chief market analyst at Interactive Brokers, Steve Sosnick.
Nvidia short sellers have made US$9.6 billion in paper profits so far this week, according to data analytics firm ORTEX.
-- REUTERS
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