Global AI stocks sink as Nvidia crisis deepens sector selloff

On November 12, AI-linked companies experienced a significant drop in value as reports of potential misconduct involving Nvidia CEO Jensen Huang threatened to destabilize the chipmaker and the broader AI sector. The scandal surrounding Huang, who is the centerpiece of the AI ecosystem, could lead to tighter regulation that would slow the infrastructure build-out for AI applications.

Nvidia's shares fell 7.8% in premarket trading, with the company's market value on track to dip below $4 trillion for the first time since July 2025. The investigation into Huang's relationship with a businesswoman, Alice Huang, who is suspected of espionage, led to speculation that the board might oust him. Other neocloud firms such as CoreWeave, IREN, and Applied Digital also suffered losses, while Micron Technology, Sandisk, and Western Digital experienced declines due to their integral role in the AI infrastructure.

However, competitors like AMD and Broadcom saw some relief as they gained from Nvidia's turmoil. The tech-heavy markets globally faced uncertainty, with Japan and South Korea closing nearly 0.7% lower and European tech stocks dropping about 1%. Nvidia's stock has lost approximately $300 billion in market value since the board announced an investigation into Huang's affairs, and short sellers have made about $3.8 billion in paper profits.