Jensen Huang steps down, and the "biggest patron" of new AI players is gone too

Jensen Huang’s abrupt resignation not only marks the end of an era for Nvidia but also plunges the most significant funding source in the entire AI startup ecosystem into deep uncertainty. Over the past three years, under Huang’s leadership, Nvidia has invested more than $140 billion in AI startups, cloud service providers, and cutting-edge AI labs, making it an irreplaceable “primary financier” of the sector. Now, with the founder’s departure, the market is repricing whether this funding pipeline can continue.

Following the announcement of Huang’s resignation on Thursday (November 12th), Nvidia’s stock price fell nearly 7% intraday, with a cumulative drop of more than 25% over the past two weeks. At the same time, shares of emerging cloud providers CoreWeave and Iren—which Nvidia holds stakes in—also dropped about 7% that day. According to tech media outlet The Information, venture capitalists, startup founders, and semiconductor executives widely anticipate Nvidia will slow its aggressive investment pace—just in the first two months of this year, these investments totaled $140 billion, including massive credit guarantees.

Meanwhile, an Wallstreet Insights article states that the $500 billion AI computing infrastructure financing platform co-developed by Nvidia and six major asset management firms was already riddled with problems before Huang’s exit, and now its prospects are even more uncertain. Under his leadership, Nvidia was hailed as the “central bank of AI”, instilling confidence in this still-nascent industry by taking stakes throughout the AI ecosystem and providing backstop support. This role was most evident during the announcement of the financing platform in August. However, Huang’s departure due to an extramarital scandal has deprived the platform of its core driving force.

Wallstreet Insights article mentions that on Thursday, Nvidia announced Huang had resigned as President, CEO, and Director, effective immediately. The company’s Chief Financial Officer, Colette Kress, has become interim CEO. According to The Information, people familiar with Nvidia’s investment decisions said, Kress previously disagreed with several deals Huang strongly promoted; her style is markedly conservative, and she is not expected to push transactions at Huang’s pace.

Which deals are signed and which remain pending

According to The Information, investments with legally binding contracts already signed are not expected to be affected. Safe Superintelligence (with Nvidia planning a $5 billion investment) and Thinking Machines Lab founded by former OpenAI CTO Mira Murati (Nvidia plans to invest about $2.5 billion, roughly half of the $4 to $5 billion funding round), according to those close to both companies, had their contracts signed months ago, so investments are expected to proceed as scheduled.

However, deals still in negotiation face greater uncertainty:

Anthropic: Nvidia plans to invest $10 billion in Anthropic’s upcoming IPO, but it is unclear if this plan will proceed. Previously, Nvidia had provided Anthropic with $105 billion in data center leasing credit guarantees.

Figure AI: Nvidia has already invested twice in this humanoid robotics company and was reportedly discussing an additional $1 billion investment recently, but the latest progress is unknown.

Nscale: Nvidia is negotiating to provide this emerging cloud provider with over $5 billion in credit guarantees for building a 460 MW data center. The agreement had not been signed as of late October.

Firmus: This Australian cloud provider is seeking at least $2 billion in private funding after withdrawing its IPO. Nvidia had participated in negotiations, but the outcome remains uncertain.

Lambda: Nvidia has committed to guarantee nearly $20 billion in leases and signed a $1.5 billion chip leaseback deal. The company is currently in a new funding round, and whether Nvidia will participate is unknown.

Reflection AI: Nvidia has cumulatively invested over $1 billion in this startup and is reportedly in talks for additional investments, but people close to the company say Reflection is not currently raising funds.

According to The Information, Jensen Huang was highly personally involved in Nvidia’s investment decisions. He would meet founders directly and, upon learning a favored startup had other potential investors, would act quickly. Nvidia typically does not lead funding rounds or set valuations, but often writes the biggest check.

A source cited in the report, who has invested in numerous startups backed by Nvidia, said:

“Jensen’s support for the startup ecosystem was genuine because he had a founder’s mindset himself. If the next CEO lacks this perspective, it’s unlikely they’ll be as generous.”

Huang also had a habit of pushing staff to prioritize speed over thorough due diligence, according to people familiar with Nvidia’s investment operations. This approach is expected to fundamentally change with Kress as CEO.

$500 Billion Funding Platform: Stalled After Its Highlight Debut

Additionally, an Wallstreet Insights article describes how in August, Jensen Huang—wearing his iconic leather jacket—appeared on television alongside executives from Apollo Global Management, BlackRock, Blackstone, Brookfield Asset Management, Goldman Sachs, and KKR, jointly announcing the launch of an AI computing infrastructure financing platform targeting $500 billion in size. However, months after the high-profile debut, the platform has yet to see a single deal materialize.

Bloomberg reports that, according to insiders, after months without any transactions, Nvidia has faced pressure over the past month from some clients and Wall Street partners to increase the proportion of financing backstop it provides. Currently, Nvidia’s “residual value support agreement” is capped at 25% of the deal size, below the level offered by rival Broadcom. This gap is viewed as one of the main factors stalling deal completion. Insiders say Nvidia may not announce any deals until January next year at the earliest.

Broadcom has set the precedent for such deals through its “AI XPV” platform, co-established with Apollo and Blackstone. In May, Broadcom provided $30 billion of backstop in a $35 billion debt transaction to support Anthropic’s leasing of TPUs co-produced by Broadcom and Alphabet (Google). According to Broadcom’s 8-K filing, the company will also provide about 72.5% ($43 billion) backstop for another $63 billion transaction. In comparison, Nvidia’s commitment is just 25%, a significant difference.

Kress Takes Over: A More Conservative Style, a More Complex Situation

According to The Information, Kress, age 59, joined Nvidia in 2013. She previously served as CFO of a division at Cisco and as a finance executive at Microsoft. Besides Huang, she was the only regular attendee at Nvidia’s quarterly earnings calls and is somewhat well-known in the investment community.

However, Kress’s challenges extend far beyond adjusting investment pace. The Information reports that a cloud provider executive who buys Nvidia chips said the uncertainty caused by Huang’s departure is prompting his company to consider switching to other chip suppliers like Google or AMD—previously, the company contemplated diversified procurement but abandoned the idea for fear of upsetting Huang.

On the Washington front, Huang had previously maintained close relations with the Trump administration, actively lobbying to ease chip export restrictions. With Kress at the helm, it is also unclear whether Nvidia’s policy influence can be sustained. According to The Information, bipartisan members of Congress have already begun calling for tighter export controls on Nvidia chips, with related legislation possibly passing as part of the Defense Authorization Act in the coming weeks.

According to The Information, competitors such as AMD and Broadcom lack Nvidia’s capacity to provide large-scale credit guarantees for cloud service providers and data center developers over the past year, but it remains unknown whether this advantage will persist in the post-Huang era.

“Nvidia has always leveraged its balance sheet to drive massive investments,” said Craig Coben, managing director at financial advisory firm Seda Experts and former Bank of America equity capital markets banker. “Without Jensen Huang at the helm, can the company sustain this kind of frenetic deal pace?”