Jensen Huang Resigns as Nvidia CEO in Shock to AI Startup Funding

IT之家 November 15 news — this is a personnel change that has shaken the global technology industry. Jensen Huang, who led Nvidia for 33 years and co-founded the chip giant, has officially resigned as chief executive officer. TechCrunch, citing the founder of an emerging cloud computing company, reported that his first reaction upon hearing the news was: "It was like a bomb suddenly going off."

For the past several years, Nvidia has been a major investor in technology startups, pouring tens of billions of dollars into startups each year. According to PitchBook data, Nvidia participated in 105 funding rounds this year alone and was frequently the largest investor.

Maria Davidson, founder of Relational Capital, said: "If Nvidia changes direction, it would be a heavy blow for many young companies."

Multiple investors believe that Huang's departure means the startup ecosystem has lost one of its most important backers and will face a sharp reduction in funding in the short term. This could have a major impact on financing deals, company valuations, capital supply, and even the competitive landscape of the industry.

Shamillah Bankiya of Dawn Capital said: "From application-layer startups to emerging cloud service providers, Nvidia has supported almost the entire AI-native startup ecosystem."

Umesh Padval, managing partner at Seligman Ventures, said that many of Nvidia's important startup investment decisions often came directly from Huang himself. Padval previously served on the board of network chipmaker Mellanox Technologies, which is how he came to know Huang. Nvidia acquired the company in 2020 for about $7 billion (IT之家 note: approximately RMB 46.828 billion at current exchange rates).

Although investors hope that Huang's successor will continue the previous active investment strategy in the future, they do not believe this will happen in the short term.

Nvidia's interim CEO Colette Kress is expected to make some adjustments to the company's investment strategy, especially regarding investments in AI startups. These companies are at the center of a wave of data center construction worth hundreds of billions of dollars, and Huang's frequent investments in this area had already raised concerns on Wall Street.

One investor, commenting on Kress, said: "Her style is much more conservative. I don't think she will invest at the same scale to continue supporting the early-stage startup ecosystem."

Nvidia's previous key investment areas included emerging cloud service providers, AI inference service providers, and open-weight models. These businesses usually require substantial capital investment, and it is difficult for small companies to bear the construction costs on their own.

Zain Javaid, founder of hardware company Ghost, said: "Despite the high construction costs in these areas, the initiatives pushed by Huang were an important reason the related startup ecosystem was able to take shape."

For example, Nvidia invested in CoreWeave while it was still a private company, and also participated in two funding rounds for Crusoe, including a $1.4 billion (approximately RMB 9.366 billion at current exchange rates) Series E round.

This year, Nvidia also acquired Hugging Face for $13 billion (approximately RMB 86.966 billion at current exchange rates), with the deal expected to close in 2027. In addition, Nvidia has invested in companies such as Mistral AI, Lambda, and Black Forest Labs, and served as the largest investor in many financing deals.

The Wall Street Journal reported that last year Nvidia wrote an $800 million (approximately RMB 5.352 billion at current exchange rates) check to Reflection AI as part of its $2 billion (approximately RMB 13.379 billion at current exchange rates) Series B round. At the time, the open-source-model-focused startup had not yet begun generating meaningful revenue.

Bankiya believes that Huang's willingness to invest heavily in AI companies globally is closely related to his emphasis on open-source technology and the European market. She said that if Nvidia stops supporting regions outside the United States, especially the European market, those regions will face a huge funding gap, and the entire startup ecosystem may experience a gap that is difficult to fill.

Of course, Nvidia's influence in the AI startup ecosystem is also so strong that it sometimes feels as though the company has formed a kind of monopoly.

By providing substantial funding support to a large number of startups, Nvidia has in effect also tied these companies to its own chips to a certain extent, further consolidating its market dominance.

If Nvidia tightens startup investment in the future, other chipmakers and smaller competitors may gain more room to grow. Coincidentally, while the fallout from Huang's departure was still unfolding, Google also announced this week the launch of two new purpose-built chips.

Some investors interviewed by TechCrunch hope that large cloud computing companies and other chipmakers can take up the baton left by Nvidia, provide funding to startups, and fill the investment gap that may appear after Huang's departure.

Dharmesh Thakker, a general partner at Battery Ventures, expects Nvidia's technology giant competitors to compete for its leading position in startup investment.

He said that ultimately, who can take on this role depends on which company can simultaneously offer excellent products, an ecosystem and developer community capable of competing with CUDA, and the substantial financial strength needed to support the construction of the entire ecosystem.

CUDA is a software platform launched by Nvidia that helps developers run AI models on its GPUs.

Thakker believes that companies such as Google, Amazon, Microsoft, and AMD may invest in some mature startups to promote the adoption of their own chips and cloud services, but he doubts whether these companies would be willing to invest hundreds of millions of dollars in pre-revenue infrastructure startups the way Nvidia previously did.

One venture capitalist revealed that during Huang's tenure at Nvidia, some infrastructure companies that needed to spend $100 million to $500 million (approximately RMB 669 million to RMB 3.345 billion at current exchange rates) to purchase GPUs were often able to obtain hundreds of millions of dollars in financing from Nvidia, and even received funding support when their valuations reached $1 billion (approximately RMB 6.69 billion at current exchange rates) or more, enabling them to launch their businesses.

Nvidia's participation also gave other investors more confidence, making them willing to continue investing in these companies even in the face of high valuations.

Now the market expects Nvidia to be more cautious in selecting new investment targets, while reducing the size of individual investments in companies within its existing portfolio, which could further depress the valuations of the companies involved.

Padwal said: "As long as Nvidia appears on the list of financing shareholders, everyone feels reassured."

Investors believe that without Nvidia's support, traditional venture capital firms may become more cautious when injecting funds into these startups, or even pause some investment deals.

However, few believe that Nvidia's slowdown in investment alone is enough to end the prosperity of the entire AI industry.

Although everyone agrees that Huang Renxun's departure is a major loss for Nvidia, Amulya Vishwanath, a former employee of Huang Renxun who has now founded her own venture capital fund, said: "Entrepreneurs and business leaders must be responsible for their own actions."

She also emphasized that the entire startup ecosystem depends on far more than just one person. "These talents will continue to grow, and they must also continue to thrive."