Nvidia faces uncertainty following Jensen Huang's departure

The fall of a tech kingmaker

Jensen Huang's departure from Nvidia has sent a shockwave through the global technology market. Shares of the company plunged 13% in early trading as investors reacted to the news of his exit. Huang has been the face of the company, often appearing in a leather jacket to convince world leaders of the power of his technology.

Nvidia currently stands as the world's second-most valuable company, largely because it produces the graphics processing units (GPUs) that power AI models like Claude and ChatGPT. Without these specific chips, the current AI economy would essentially grind to a halt. This position has made Huang a central figure in the global race for technological supremacy.

The transition leaves many wondering if the company can maintain its momentum without its primary architect. While other tech giants like Google, Meta, and Microsoft are developing their own AI chips, Nvidia currently holds a unique position of dominance. The question now is whether that dominance is tied to the hardware itself or to the man who built the network around it.

The central bank of AI

Nvidia is frequently described as the 'central bank of AI' because it is deeply enmeshed in every layer of the industry. It does not just sell chips; it actively finances a web of companies to ensure demand remains high. For example, Nvidia has funded 'neoclouds' to build datacentres that rent out its hardware to the world's largest AI firms.

This strategy helps Nvidia keep the risks of building infrastructure and finding customers off its own balance sheets. It also involves a circular financial model where Nvidia provides massive sums of cash to startups and companies like OpenAI. These entities then use that capital to purchase more of Nvidia's advanced chips, creating a self-sustaining loop of investment and consumption.

This interconnectedness means that a tremor in Nvidia's fortunes could ripple through the entire AI economy. Because the company is so integrated into the financial structures of its customers and partners, its stability is linked to the broader market. The opacity of these arrangements makes it difficult for outside observers to see the full extent of these ties.

Sovereign AI and global ties

Huang served as a primary diplomat for the AI era, meeting with numerous world leaders to promote 'sovereign AI.' In 2025, he engaged with figures such as Keir Starmer, Emmanuel Macron, and Mohammed bin Salman to discuss national AI plans. These meetings often resulted in non-transparent agreements to supply precious, hard-to-get chips to various governments.

One such arrangement involved a promise to supply 260,000 advanced chips to South Korea. However, the specific terms of these deals, including delivery dates and payment structures, were not immediately clear to the public. These high-level relationships served as a guarantee for many nations' technological ambitions, placing Huang at the center of global geopolitics.

The lack of transparency in these government contracts has drawn scrutiny from investigators. While these deals secured Nvidia's position as a primary supplier, they also created a murky environment regarding how chips are distributed. The departure of the man who brokered these deals leaves the future of these international agreements in a state of uncertainty.

Manufacturing and trust

A critical pillar of Nvidia's success is its relationship with the Taiwan Semiconductor Manufacturing Company (TSMC). TSMC is arguably the most important player in the supply chain because it manufactures the overwhelming majority of the world's AI chips. Because manufacturing these chips is so complex and expensive, TSMC currently has no real competitor in the space.

The partnership between Nvidia and TSMC is built on decades of high-trust relationships. Lore suggests that Huang personally wrote a letter to the CEO of TSMC in 1997 to introduce himself. This long-term cooperation has been essential for refining the extreme ultraviolet spectrum lasers used to etch nanometre lines into the silicon.

Despite this success, the manufacturing process remains incredibly difficult, with a 60% yield rate for the most advanced chips. This means 40% of the chips produced are still found to have defects. The stability of this manufacturing pipeline is vital for Nvidia, and it remains to be seen how the transition in leadership will affect these deep, personal corporate ties.

Risks of the opaque kingdom

The complexity of Nvidia's kingdom has also led to significant security and transparency concerns. Investigators have struggled to navigate secretive corporate contracts and tangled export records. One notable instance involved a small Singaporean company called Megaspeed, which secured roughly $7.5bn worth of GPUs despite other companies facing long wait times.

This situation was complicated by allegations that an executive at Megaspeed had a personal relationship with Nvidia's leadership. It was further alleged that this connection allowed the company to act as a conduit for smuggling chips into China. Such incidents highlight the risks associated with the 'glad-handing' and personal networks that Huang helped cultivate.

A new chief executive might bring more predictability and transparency to the company's supply chains and contracts. However, there is a risk that making these relationships more transparent could expose elaborate debt structures or handshake agreements. As the initial dazzle of the AI boom fades, the company faces a period of intense scrutiny regarding its true internal workings.