Nvidia scandal: Jensen Huang affair shakes AI sector as $400B vanishes

Nvidia lost approximately $400 billion in market value over two days after CEO Jensen Huang admitted to an affair with an executive suspected by US authorities of being a Chinese spy, shaking the artificial intelligence industry. The scandal arrives as investors question massive AI spending and Anthropic prepares for its stock market debut. The chipmaker's shares fell 4.3% on Monday and over 5% on Tuesday, according to Reuters. The Information reported the relationship helped facilitate $7.5 billion in chip exports to Chinese companies, though Reuters could not confirm this. Analysts worry about Nvidia's dependence on Huang, who has no obvious successor, and his role as a key industry interlocutor with President Donald Trump. Anthropic's November 19 Nasdaq debut, with shares priced between $70 and $78, could value the company at up to $1.4 trillion, down from earlier estimates of $2 trillion. Nvidia is among anchor investors. The scandal compounds broader sector concerns, including a $9 trillion AI investment cycle under scrutiny and companies like Revolut cutting AI costs by 90% by switching to cheaper open models.