Global stocks reversed early gains on Friday as investors assessed the fallout from Nvidia chief executive Jensen Huang’s resignation, bringing a turbulent week to a close with fresh uncertainty over the artificial intelligence industry, semiconductor supply chains and US technology policy.
Huang stepped down on Thursday following revelations about extramarital affairs, including an alleged relationship with a woman suspected by US intelligence of having links to Chinese intelligence. The disclosures plunged the world’s most valuable AI chipmaker into a leadership crisis, raising questions about the future direction of a company that has become central to the global AI investment boom.
The departure has implications beyond Nvidia’s corporate governance. Huang played a major role in shaping the company’s commercial relationships, including efforts to preserve access to China, while maintaining close ties with US President Donald Trump. His exit is expected to influence Washington’s approach to semiconductor exports, Nvidia’s relationships with major customers and the wider network of companies dependent on its computing technology.
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“Jensen has obviously been a singular force in many ways so the impact will likely be felt far and wide,” UBS analyst Timothy Arcuri said.
He noted that Nvidia had become an important source of funding for emerging cloud computing providers, large language model developers, ecosystem partners and suppliers. Huang had been a driving force behind these relationships, Arcuri said, warning that even if a successor maintains the same commercial strategy, the company could temporarily slow its dealmaking.
“Even if a new leader ultimately maintains a similar approach, there is likely to be some ‘pause’ in the company’s willingness and ability to continue pursuing these deals in the near term,” he added.
The uncertainty spread across technology markets, particularly in Asia, where several companies depend on Nvidia’s products or supply relationships to support their AI ambitions.
Shares of Nvidia customers and technology partners came under pressure on Friday. South Korea’s Naver fell more than 5%, while Chinese AI model developers Z.AI and MiniMax recorded sharp declines amid concerns that Huang’s departure could complicate their access to advanced AI chips.
The pressure extended to Chinese data center suppliers Zhongji Innolight and Eoptolink Technology, whose businesses are heavily exposed to US markets. Their shares also slumped as investors reassessed the potential consequences for semiconductor supply chains and AI infrastructure investment.
The market reaction reflects the importance of Nvidia’s position in the AI ecosystem. Its processors are widely used to train and operate advanced models, while its commercial partnerships help connect chip suppliers, cloud providers, AI developers and infrastructure companies.
A change in leadership could consequently affect more than Nvidia’s own operations, particularly if it leads to a reassessment of partnerships or a shift in its approach to China.
However, the disruption could create opportunities for competitors. Jon Zauderer, Citi’s head of specialist sales and a technology, media and telecommunications specialist, said Advanced Micro Devices, Arista Networks and Broadcom could benefit from the uncertainty surrounding Nvidia.
Investors may look more closely at alternative chipmakers and networking suppliers if customers seek to diversify their technology partners or reduce dependence on Nvidia. However, analysts expect the extent of any gains to depend on competitors offering comparable products, supply capacity and software support.
The MSCI broadest index of Asia-Pacific shares outside Japan fell 0.42%, reversing earlier gains. South Korea’s Kospi dropped 0.85%, while Japan’s Nikkei advanced 0.55%.
US equity futures also weakened, with Nasdaq futures down 0.3% and S&P 500 futures losing 0.1%. EURO STOXX 50 and DAX futures fell more than 0.4%, while FTSE futures declined 0.3%.
The political implications of the Nvidia crisis also widened. US Senate Banking Committee Chairman Tim Scott sent letters on Thursday to Commerce Secretary Howard Lutnick and Huang requesting their testimony over recent developments at the chipmaker. The requests add congressional scrutiny to an episode already raising questions about US technology policy and national security.
Treasury Yields and Dollar Rise as Fed Outlook Shifts
The pressure on equities coincided with rising US Treasury yields, as investors reassessed the Federal Reserve’s interest-rate outlook following stronger-than-expected inflation data.
The two-year Treasury yield reached 4.8920% during early Asian trading, its highest level in a month, while the benchmark 10-year yield climbed to 5.1433%, a three-week high.
Markets are increasingly pricing in the possibility of a more aggressive response from the Fed. According to the CME FedWatch tool, investors assigned a 13% probability to a 50-basis-point rate increase in December, compared with no such probability a week earlier.
The shift follows a hotter-than-expected consumer price index reading, raising concerns that inflation could remain persistent enough to force the central bank to tighten monetary policy further.
“Right now, the US Fed has three hikes priced in for effectively the next 12 months,” said Manusha Samaraweera, fixed income investment director at Capital Group.
“If those kinds of prints continue to happen, we can definitely see the Fed hiking three more times. It’s very within the realms of possibility,” he added.
Higher interest-rate expectations supported the dollar, which was on course for a weekly gain of 0.9%, its strongest performance in more than a month.
The stronger greenback placed additional pressure on the Japanese yen, which remained close to the psychologically important 160-per-dollar level. Traders were watching for possible intervention from Tokyo to prevent further weakness.
The Federal Reserve Bank of New York disclosed on Thursday that it purchased 79.4 billion yen, worth $497.37 million, in the spot market on July 31. The transaction involved selling euros from the US Treasury’s Exchange Stabilization Fund as part of a joint US-Japan intervention during the summer to support the yen.
Elsewhere, copper prices were heading for a weekly decline as concerns about weaker demand weighed on the industrial metal. Shares of Australian-listed Capstone Copper fell more than 5% on Friday, extending the pressure on mining stocks.
Oil prices were also on course for a second consecutive weekly decline. A continued US blockade of Iran eased fears of renewed fighting in the Middle East, although attacks on shipping remained a potential threat to supplies.
Brent crude rose 0.25% to $96.06 a barrel, while US West Texas Intermediate crude fell 0.26% to $88.52. Both benchmarks were still set to lose more than 2% over the week.
Spot gold gained 0.5% to $3,896.33 an ounce.
However, the week’s market movements have exposed two sources of uncertainty for investors: the consequences of Nvidia’s leadership crisis for the AI industry and the possibility that persistent inflation could force the Federal Reserve to raise interest rates further. Together, they threaten to complicate the outlook for technology valuations and the financing of an AI infrastructure boom that depends on sustained investment by some of the world’s largest companies.