Jensen Huang Resigns From Nvidia After China Spy Scandal

Jensen Huang resigned as CEO of Nvidia on Thursday morning, ending his 33-year run at the company he built into the world's most valuable — a fall triggered by reports that U.S. intelligence believed he had been involved with a woman working as a Chinese intelligence asset.

The announcement named CFO Colette Kress as interim CEO and gave no reason for the departure, Fortune reported. Huang's exit came just three weeks after a European tour in which he preached the AI boom from a converted church in West London, shouting at founders: "I'm gonna invest in you!" — "We're not your largest investor, but we are your best investor."

How did the collapse unfold?

The first blow landed when the New York Times reported allegations involving Alice Huang (no relation), a former executive at Megaspeed, a Singapore-based data center company that had bought billions of dollars' worth of Nvidia chips. People briefed on U.S. intelligence told the Times she had been recruited by China's Ministry of State Security to gather information on American AI chips and to persuade Nvidia to push for advanced chip sales in China.

Within a week, Huang sent a memo to Nvidia's 42,000 employees acknowledging he had been "unfaithful" to his wife and was "deeply sorry." The board launched an independent investigation, congressional leaders summoned him to answer questions, and federal agencies opened probes. Nvidia shares tumbled, and prediction sites took bets on his resignation.

The second shoe dropped when the Times reported allegations of a second affair, this time with an Nvidia executive who reported directly to Huang. By the next morning, Huang had resigned. "I support the investigation and will cooperate fully," he wrote in his only public statement. "I am committed to protecting Nvidia and supporting America's national security."

In trading after his resignation, Nvidia stock dove as much as 14%, briefly pushing the company below a $4 trillion market cap for the first time in more than a year.

How deep does the money web go?

Critics have long warned that Nvidia's investments created a risky "circular" web: Nvidia pours money into AI labs and data center companies, which then buy Nvidia chips. The numbers are large:

• Nearly $50 billion invested in leading AI model companies as of end of July, with total equity investments across the AI ecosystem at twice that
• $170 billion pledged in financing commitments, including guarantees valued at $105 billion to OpenAI for a single Ohio facility
• Talks with Wall Street lenders to backstop a $500 billion plan turning AI chips into tradable securities
• About $99 billion held across what Huang called AI's "five-layer cake"

Huang dismissed the bubble charge. "We've created an industry that the VCs alone cannot fund," he told Fortune, adding the bets "have returned fabulously." Michael Burry, the investor famed for betting against the housing bubble, calls it "circular financing" inflating a dangerous bubble. Analyst Jay Goldberg of Seaport Research Partners says nobody inside Nvidia could replicate Huang's role: without him, "they're going to become just another chip company."

What happens next in Washington?

Ed Mills, a policy analyst at Raymond James, said Huang's departure "guarantees new export controls." Three bills proposing new controls on AI chips and advanced semiconductor equipment are attached to the defense authorization bill awaiting passage, and the scandal is "the accelerant" to push them through, he said. Treasury Secretary Scott Bessent suggested Howard Lutnick's Commerce Department had stalled restrictions on Megaspeed, and Lutnick has been summoned to testify before the Senate Banking Committee.

The neoclouds — including Nebius and CoreWeave — are the most exposed companies, and Anthropic is set to go public days after Nvidia reports its first quarterly earnings without Huang. Nvidia agreed to buy about $10 billion of shares in a $26 billion private placement alongside the listing.

The likeliest winners, per Goldberg: AMD and Broadcom. The AI boom ran largely on faith in Jensen Huang — and the world is now waiting to see if the church he built stays standing.