Intel and other stocks which Nvidia has invested in were trading lower Thursday. The resignation of Nvidia CEO Jensen Huang raises some questions over the future of the chip maker's stakes in companies across the artificial-intelligence supply chain.
Intel shares were down 2.2% in early trading. AI chip-and-networking company Marvell Technology was falling 3.4%,.
Among optical-networking firms, Coherent was losing 2.6%, Lumentum Holdings was down 4.6% and Corning was dropping 2.9%.
Under Huang's leadership, Nvidia has invested in all of those companies as part of efforts to fuel the wider AI ecosystem. The next CEO will have to decide whether to continue that strategy.
It seems unlikely that Nvidia will either want or have to divest its stakes immediately. The investments in Marvell, Coherent, and Lumentum -- each originally valued at $2 billion -- were made as part of a plan to build up the company's optical-networking supply chain. That's still a relevant factor as data centers increasingly turn to optical networks to transfer data faster.
With Marvell and Lumentum, there is the additional consideration that the two companies have announced plans to combine -- a deal reportedly approved by Huang, according to Bloomberg. Although the deal is in question following a steep stock-price decline since it was announced, Nvidia is unlikely to want to do anything that would risk derailing the merger plan.
Intel is a slightly different issue. Nvidia invested $5 billion in its chip peer in September last year, forming a partnership to integrate Intel's central-processing units with its own graphics-processing units. That stake is now worth about $13.4 billion based on Wednesday's closing price of $62.50. That's a great return but Nvidia isn't in any need of extra cash and a sale might be frowned upon by the Trump administration, which sees Intel as a champion of U.S. chip-making.
So the threat isn't forced sales. But there is a risk Nvidia will face delays or move slower on future purchases and partnerships under a different leader. That could be bad news for multiple companies which were depending on Nvidia's dominance and growth to fuel their own sales in the future.
"While existing contracts will survive a CEO change, what's at risk is the next round of deals, and with it Nvidia's ability to defend its share into 2027 and beyond," wrote William Blair analyst Sebastien Naji in a research note.
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