Nvidia shares plunged 16 per cent as Wall Street opened on Thursday, wiping nearly $600bn (£460bn) off the chip giant’s market value following the shock resignation of chief executive Jensen Huang.

The sell-off spread across the wider tech sector, with AI cloud computing firm Coreweave falling six per cent, while the tech-heavy Nasdaq and S&P 500 also opened lower.

Huang stepped down after 33 years at the helm of Nvidia following revelations of two extramarital affairs, including one with a woman suspected by US intelligence officials of spying for China.

The 63-year-old, who co-founded Nvidia in 1993, had become one of Silicon Valley’s most influential executives after transforming the company into the dominant supplier of chips powering the global artificial intelligence boom.

His departure follows reports on Wednesday of a second affair involving Kimberly Powell, Nvidia’s vice president of healthcare, who reported directly to him.

Nvidia’s board met on Wednesday evening before announcing that long-serving finance chief Colette Kress would take over as interim chief executive.

The company has appointed Harvey Jones as chairman and launched a search for a permanent replacement.

Nvidia sell-off rattles AI stocks

The sharp fall in Nvidia’s shares marks one of the largest single-day losses in stock market history, adding to a bruising week for the chipmaker.

The company accounts for roughly six per cent of the S&P 500, meaning its share price movements can have an outsized impact on the wider US market.

South Korea’s tech and chipmaker-heavy Kospi index closed down 0.6 per cent on Thursday, and the Taiwan Semiconductor Manufacturing Company was trading down about 1.7 per cent.

Nvidia supplies an estimated 90 per cent of the advanced processors used in major AI projects, putting it at the centre of the industry’s vast infrastructure spending plans.

The company has also invested billions in AI developers, cloud computing firms and data centre operators, raising concerns that uncertainty over its leadership could spread across the sector.

“While Nvidia’s share price rocketed over the last few years, very few people were asking deep questions about CEO succession planning, board composition and challenge, or oversight of geopolitically sensitive aspects of company strategy,” she said.

“Now, all those issues will be front and centre, perhaps not just for Nvidia, but also for other founder-led companies like Anthropic, Meta Platforms and SpaceX.”

Kress, who joined Nvidia in 2013, has overseen its finances throughout its transformation into one of the world’s most valuable companies.

Nvidia’s newly appointed chairman said the board had “full confidence” in Kress and expected operations, customer commitments and product development to continue without interruption.

The leadership crisis comes at a particularly sensitive moment for the chipmaker, with Nvidia due to report its latest quarterly earnings next Tuesday.

Investors are already scrutinising whether the hundreds of billions of dollars being poured into AI infrastructure will deliver sufficient returns.