Nvidia scandal deepens, dragging global AI stocks lower

AI-linked stocks fell Thursday as a deepening scandal involving Nvidia CEO Jensen Huang threatens his leadership, adding to sector pressures from funding and regulatory concerns. Nvidia shares dropped 7.8% in premarket trading, putting its market value on course to fall below $4 trillion for the first time since July 2025. The board is reportedly deciding whether to oust Huang following an investigation into his relationship with Alice Huang, alleged to be a Chinese spy. Nvidia-backed neocloud firms like CoreWeave fell 6%, while other AI-related companies, including Micron, Sandisk, and Dell, also declined, though rivals AMD and Broadcom rose on potential opportunity. Nvidia has lost about $300 billion in market value since the investigation was announced Sunday, with short sellers gaining $3.8 billion in paper profits. The stock trades at its lowest valuation since 2012, while global tech markets in Japan, South Korea, and Europe also saw declines.