Is Nvidia "too big to fail"?

Jensen Huang, co-founder and former CEO of Nvidia, is out of the company, following investigations into multiple extramarital affairs — two with subordinates at the chip firm and one with a puported Chinese spy. Huang resigned on Thursday.

In the interim, chief financial officer Colette Kress will serve as CEO until the chipmaker can find its next leader.

This is a big shakeup for the artificial intelligence industry. Not only is Nvidia the largest company by market capitalization in the world, but it’s also the world’s foremost designer of semiconductor chips, which are essential to the buildout of AI infrastructure.

“Marketplace” host Kai Ryssdal spoke with Meghan McCarty Carino, host of “Marketplace Tech,” about whether Nvidia is too big to fail, and what Huang’s resignation means for the AI industry writ large.

The following is an edited transcript of their conversation.

Kai Ryssdal: So, test my premise, would you? Nvidia is the white-hot center of AI right now, and without it, AI wouldn't be what it is in this economy. True or false?

Meghan McCarty Carino: I'm gonna say true there. You know, most of the sort of breakthroughs in AI that we have seen leading up to this AI moment that we're in, have been reliant on computing power. You know, make the models bigger, give them more computing power, and that computing power is coming overwhelmingly from Nvidia.

Ryssdal: A large part of what's going on in AI, the AI industry, the AI economy generally, is financing, right? These guys are borrowing and spending hundreds of billions of dollars. Nvidia is at the center of that too.

McCarty Carino: That's right. So you know, we talk a lot on the show about circular financing, this sort of web of interdependencies in AI. Nvidia is at the center of that web. It has all these little nodes coming out from it, it has taken major equity stakes in AI companies, to which it also sells chips: OpenAI, xAI, Anthropic. It also operates a big venture capital arm that provides seed funding for startups — many of which also rent or buy its chips. It's also a major investor in the, kind of, AI infrastructure supply chain. So yeah, very central role there in terms of the finance.

Ryssdal: Jensen Huang has his leather jackets. He's got the sneakers, I think, that he wears. The comparisons, of course, are made to Steve Jobs and Jobs as a salesman for computers and Apple specifically. Huang played that role, like, for the entire industry, yeah?

McCarty Carino: I think Jensen has sort of been seen as one of the most sort of forceful and convincing voices for what you might consider like a positive, normal vision of AI progress, which I think stands kind of in really stark contrast to some of the stuff that we hear from the leaders of Anthropic or OpenAI, the kind of alarmist doom and gloom. I think it's a view that really endeared him to the Trump administration for sure. But I think there were a lot of people in the tech industry who hoped that Jensen's reputation for being this very competent and trustworthy straight shooter, that he could provide a counterpoint to that doom-and-gloom narrative that we hear so much.

Ryssdal: Have you been out and about today? Did you go to the store? Did you run to Starbucks or whatever?

McCarty Carino: I have not been out and about.

Ryssdal: You've been tied to your phone?

McCarty Carino: I’ve been stuck glued to the computer!

Ryssdal: All right. Well, let's let's hypothesize. What's the vibe in Silicon Valley today? That's my question.

McCarty Carino: We're a place that's prone to earthquakes. It feels like an earthquake has hit for sure. I mean, when I first started reporting on Nvidia, people didn't even really know how to say the name. It was like, is it “Nuh-vidia”? And now it's a household name. It's kind of the center of gravity for the entire tech industry. We went earlier this year, we were looking out over this ever-expanding campus of Nvidia in Santa Clara, and looking around at all of the data centers that were popping up, still being constructed and just all full of Nvidia chips.

It has changed the landscape of Silicon Valley — even down to sort of the little prosaic Picayune details of the Denny's in San Jose. I went there a couple years ago. This is the sort of origin story of Nvidia, where Jensen and his co-founder supposedly hatched the idea for a video game graphics processing chip company 30 years ago, over Grand Slam breakfast. And this place was, at the time two years ago, in the process of changing a plaque on their special corner booth. They had to keep updating what the valuation of Nvidia was. And I don't know, maybe they're having to change it this week, too.