Global equities: Nvidia turmoil raises chip and AI risks – Rabobank

Rabobank’s Global Daily notes that Nvidia’s board is reportedly discussing removing Jensen Huang as CEO after personal and export-control related allegations, creating turbulence for global equities given heavy US and AI concentration. The report highlights potential chaos in the global chip trade, questions around US export-control enforcement, and broader geoeconomic ramifications involving China, rare earths and regional security dynamics.

Nvidia leadership shock and chip risks

"The Nvidia board is meeting to discuss removing Jensen Huang as CEO after revelations of an affair with a woman alleged to be a Chinese spy, another with a co-worker, and allegations the firm lobbied for and engaged in supplying China with chips despite export controls."

"It’s not just about his leadership. As the Australian Financial Review summarises, “Huang’s love life could throw the global chip trade into chaos.” This affair is seen as a “counterintelligence nightmare” given his close links to Trump, e.g., riding to Beijing on Air Force One."

"Even worse, if the US decision to look the other way on chip sales was a geoeconomic bribe to ensure Chinese rare earths and help in geopolitics, then things could get far more turbulent."

"In short, do we get escalation or de-escalation? Our base case remains the former, and we do not yet see a sustainable path to the latter."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)