Could Jensen Huang’s Departure from Nvidia Hurt AI Dealmaking and Financing? Morningstar Issues Warning

AI dealmaking and financing could come under pressure if Nvidia CEO Jensen Huang leaves the company, Morningstar said, warning of repercussions across the artificial intelligence industry. Both Nvidia and Huang are pivotal to the AI ecosystem. A departure by Huang could reduce deal activity and funding in the sector, while bringing tighter regulation and a more forceful political backlash against artificial intelligence.

At the heart of this industry-wide exposure is Nvidia’s role in connecting global AI funding, technology and supply chain networks. The company not only supplies chips to AI businesses worldwide but also invests across the sector’s value chain, with investments in OpenAI, Anthropic, xAI, CoreWeave and Nebius. Preliminary agreements signed in August this year with institutions including BlackRock, Blackstone, Brookfield and Goldman Sachs envisage mobilising more than $500 billion in funding over time. Huang had previously said that Nvidia could support up to a quarter of that amount. A serious leadership crisis at Nvidia could therefore reach well beyond the company, potentially affecting the many businesses reliant on its chips, investments and financing support.

Morningstar retained its $310 per share fair value estimate and four-star rating for Nvidia despite uncertainty over Huang’s future, signalling that it regards the shares as undervalued at current levels. According to Morningstar, demand for AI computing capacity still outstrips supply, and the investigation is not expected to affect Nvidia’s revenue over the near or medium term.

In an internal letter sent to all employees on 8 November, Huang acknowledged being unfaithful to his wife and apologised to his family, employees, the board, partners and shareholders. Reports alleged that the woman involved in the affair was an asset of a foreign intelligence agency. That same day, Nvidia’s board announced the formation of a special committee comprising independent directors, supported by independent external legal counsel, to investigate whether a foreign intelligence operation had targeted Huang. While the board said it had no current reason to believe national security interests or Nvidia’s core business secrets had been compromised, it stated that all available information would be examined in the investigation.

The developments would not impede Nvidia’s progress, its head of public policy communications stressed. Huang will remain CEO, taking forward all existing business plans without interruption. Until the independent investigation delivers its final conclusions, he will continue to discharge all his responsibilities as CEO.

Market Insight: Can Huang Weather the Crisis?

Few executives can rival Huang’s advantages. Having co-founded Nvidia in 1993, he has overseen its rise to become one of the world’s most important AI chip suppliers. The reputation built through his long record of achievements could be critical to his ability to weather the crisis. That reservoir of trust could, however, erode rapidly if the investigation concludes that he knowingly ignored the risks or that his conduct breached fundamental boundaries concerning company security and corporate governance.