Global AI stocks sink as Nvidia crisis deepens sector selloff

On November 12, artificial intelligence-linked companies suffered a decline as concerns around Nvidia CEO Jensen Huang's actions impacted the chipmaker's leadership. Nvidia, a key player in the AI ecosystem, finances the infrastructure built around its chips, a strategy that has drawn scrutiny over circular funding. This has raised risks for the sector, which has already faced funding and regulatory concerns following the Democrats' victory in the midterm elections.

Nvidia's shares dropped by 7.8 percent in premarket trading, bringing its market value close to the $4 trillion mark for the first time since July 2025. Reports suggest the board is considering whether to replace Huang. Nvidia-backed neocloud firms CoreWeave, IREN, and Applied Digital experienced losses, with CoreWeave dropping 6 percent.

Memory chipmaker Micron Technology and data storage firms Sandisk and Western Digital also declined. Photonic product makers Lumentum and Coherent, as well as AI server maker Dell, saw smaller decreases. Competitor chip-related companies Marvell Technology, Intel, Arm Holdings, and Texas Instruments experienced minor drops. AMD and Broadcom, which also produce AI chips and compete with Nvidia, saw gains.

Short sellers have earned about $3.8 billion in paper profits, with the share price falling to $163, potentially increasing to $6.8 billion. Tech markets worldwide experienced fluctuations, with Japan, South Korea, and Europe witnessing declines.