Jensen Huang has resigned as chief executive of Nvidia, the chip giant's board has said, with chief financial officer Colette Kress appointed interim boss. The announcement, tied to an affair scandal, sent shockwaves through Wall Street on Thursday, and the company's shares plummeted more than 13% when US markets opened shortly after the news before recovering some ground.

Huang, a co-founder of the chip company, has been one of the most visible and vocal proponents of the artificial intelligence boom. Nvidia is the world's second-most valuable company, and it manufactures as many as 90% of the most advanced semiconductors, chips also sought by China as it seeks to expand its AI ambitions. On Thursday the stock partially recovered from a drop of over 10% but remained down roughly 5% at midday, and its market capitalisation fell below $4 trillion for the first time since last year.S1

Huang's influence extended beyond the company itself. He had become a lightning rod for the growing AI buildout and has been influential in the Trump administration's approach to AI regulation and oversight, accompanying the president on a trip to China earlier this year. He also helmed a $500 billion funding push for AI infrastructure announced in August in coordination with half a dozen Wall Street heavyweights, including BlackRock and Goldman Sachs. Because of this, Dan Ives of Yorkville Ives & Co. said the resignation affects the broader sector more than a typical CEO departure would, writing that other US tech leaders would now have to step up even more as visionaries.S1

Not all investment professionals see the departure as a fundamental threat. Jamie Cox, managing partner for Harris Financial Group, said that scandals come and go and do not alter Nvidia's prospects for its chips, calling the situation more headline risk than material risk. For ordinary investors, Tom Hainlin of U.S. Bank Wealth Management advised against making knee-jerk changes to 401(k) allocations out of panic, noting that the market as a whole has done very well this year and is much broader than Nvidia alone.S1