Nvidia CEO exit leaves 42 AI bets and a nearly $13bn deal in play

By Daniel Okafor

Nvidia had invested in 42 of the 100 most important private AI companies, according to Bessemer Venture Partners partner Talia Goldberg. The disclosure came as Bessemer Venture Partners and Newcomer, the Cerebral Valley AI Summit's organizer, unveiled the list in San Francisco.

Hours after Jensen Huang was ousted as CEO, he was still winning on Thursday. In "Cerebral Kombat," an arcade game for summit attendees, Huang used a giant GPU to defeat Meta CEO Mark Zuckerberg.

Business Insider reported that Huang resigned as CEO on Thursday morning, 33 years after cofounding Nvidia and building it into the world's most valuable chipmaker.

The resignation followed reports of extramarital affairs, including one with a woman whom US intelligence officials suspected of spying for China, according to Business Insider. Nvidia named longtime CFO Colette Kress interim CEO.

Hundreds of founders, investors, and technology executives attended the summit. One venture capitalist asked Business Insider reporter Katie Roof, who wore black, whether she was attending Huang's funeral. Business Insider said the joke masked a real concern about the AI boom's financial backing.

What changes when Nvidia's backer steps aside?

Ali Ghodsi, CEO of Nvidia-backed Databricks, described Huang as a safety net for AI startups. Investors worried about a bubble, he said, and Huang reassured them Nvidia would help sustain the industry. "On the margin, I think that starts hurting a lot of startups," Ghodsi said.

Business Insider reported that Nvidia's influence extended beyond the chips that power much of AI. Under Huang, the company bankrolled startups that often bought those chips, earning a reputation as the "central bank of AI." The mechanism linked product demand with startup financing.

General Catalyst CEO Hemant Taneja compared Nvidia's importance with that of big banks during the 2008 financial crisis. Business Insider said the comparison implied that Nvidia had become too big to fail, with the leadership transition carrying risks beyond the company. "This is not a normal company," he said onstage, "and we all need to make sure the continuity of leadership in AI for us as a nation and for the industry at large remains."

Will open-source AI keep its champion?

Vercel CEO Guillermo Rauch worried about Nvidia's support for open-source AI after Huang's departure. "An Nvidia without Jensen is going to be, I think, a challenging one," Rauch said onstage. He hoped Nvidia's extensive partnerships would preserve Huang's vision.

In September, Nvidia agreed to acquire Hugging Face, a popular platform for sharing open-source AI models, for nearly $13 billion, according to Business Insider. Nvidia had become a major champion of open-source AI under Huang.

Palo Alto Networks CEO Nikesh Arora worried less about Nvidia's technology than about losing Huang, whom he called an unusually generous champion of the industry. Arora said Huang lent his time and influence to open-source AI and cybersecurity.

"Is there short-term instability in the moment?" he said onstage. "Most likely, because there's a whole bunch of parts of the ecosystem which need to reexamine where their champions are."

How closely will startups feel the change?

Pathway CEO Zuzanna Stamirowska told Business Insider that Nvidia had been an unusually attentive partner. Its employees constantly looked for opportunities to collaborate, she said. Stamirowska said it remained unclear whether the company could preserve that culture without Huang.

"I'd say we don't know yet," she said.

Tavus CEO Hassaan Raza worried that a stumble at Nvidia could set back America's broader AI ambitions. He said even a disappointing earnings report under new leadership could send shock waves through the industry.

"If Nvidia misses a quarter in the next year or something, oh my gosh, it's going to be a bloodbath," Raza told Business Insider.

How long can Nvidia's technical lead last?

Perplexity CEO Aravind Srinivas, whose AI search startup counts Nvidia among its largest investors, met Nvidia executives earlier Thursday and found business proceeding as usual. He said Huang had built technological advantages that would not disappear overnight.

"Even now, the best GPUs for running inference is Nvidia, and the best GPUs for running training is Nvidia, and none of that stops," Srinivas said. "It's established for years in the future."

Ghodsi expected Nvidia to remain strong for at least another two or three years because its chips have long development cycles. He said the period after that remained uncertain.

Who gains from the disruption?

Etched cofounder Robert Wachen praised Huang's contributions before saying his departure created an opening for Nvidia rivals. Etched develops specialized AI chips to challenge the incumbent. "Now we see there's probably going to be a big opening, which we plan to capitalize on," Wachen said onstage.

Taneja said the upheaval could encourage startups to consider AMD and Google alternatives rather than rely so heavily on Nvidia. Raza agreed that more competition could benefit AI, but rejected the method of forcing the change.

"This is not the best way to do it," he said, "but we'll be forced to do it."

The next test arrives with Nvidia's next quarterly earnings report under Colette Kress. Raza said a miss could trigger a "bloodbath," turning his warning into the clearest measure of whether AI's largest financial backer can survive a leadership change without Huang.