Nvidia Funded AI Boom Under Jensen Huang, but Gary Marcus Questions if New CEO Will Keep Writing the Checks: ‘Whole Thing Might Collapse’
Nvidia Corp.’s (NASDAQ:NVDA) leadership shake-up could change how aggressively the chipmaker funds the artificial intelligence industry, potentially putting an already cash-hungry AI ecosystem at risk, NYU Professor Emeritus Gary Marcus warned.
Nvidia’s New Leadership Could Rethink AI Investments
On Thursday, speaking on CNBC’s “Fast Money,” Marcus said Jensen Huang’s departure could introduce uncertainty into the network of investments and financing arrangements that have helped fuel the AI boom.
Nvidia announced Thursday that Huang had resigned as president, CEO and board member, effective immediately. Chief Financial Officer Colette Kress will serve as interim CEO while the board searches for a permanent successor.
Kress will retain her finance responsibilities during the transition.
Marcus described Huang as a major risk-taker who was willing to invest heavily in companies across the AI ecosystem. However, he suggested Kress could take a more "conservative" approach to those commitments.
“Why are we making all these bets when people are losing some confidence in the AI industry?” Marcus said, describing the kind of question Nvidia’s new leadership might ask.
He added that Huang’s exit could further weaken investor confidence in an industry already facing questions about its financial sustainability.
Nvidia’s Funding Pullback Could Trigger AI Financing Crisis
Marcus also raised concerns about the industry’s circular financing arrangements, where Nvidia invests in AI companies and infrastructure providers that, in turn, spend money on its chips and computing products.
He warned that a pullback in Nvidia’s investments could create funding gaps for companies dependent on external capital.
Marcus pointed to Anthropic’s anticipated initial public offering, suggesting that roughly $10 billion in expected funding could come from Nvidia. If the chipmaker reduced that commitment to $7 billion, the resulting shortfall could create significant complications.
He noted that large language model developers are losing money and need substantial investment to sustain operations.
“Any kind of move like that and the whole thing might collapse,” Marcus said.
Earlier this week, The Telegraph reported that Nvidia-backed British cloud and data-center provider Nscale is considering delaying its planned $35 billion stock market listing until next year.
Price Action: Nvidia shares are up 0.99% in after-hours trading, reaching $167.84, according to Benzinga Pro.
Benzinga Edge Stock Rankings place Nvidia in the 12th percentile for Momentum and the 98th percentile for Growth, while its price trends remain negative across the short, medium and long term.
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