Business Brief: (Almost) everything you need to know about Nvidia

Good morning. Today, we’re on AI bubble watch after the shock resignation of Nvidia Corp.’s founder deepened fears of stress across the sector.

Also on our watch: If you use Microsoft apps like Outlook or Copilot, you might know the company isn’t doing the tech world any favours.

In focus

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What to know about the ousting of Nvidia’s CEO

The news: Nvidia will begin its first search for a chief executive in its 33-year history.

Founder and chief executive Jensen Huang resigned following revelations of extramarital affairs – two involving his employees and one involving an alleged Chinese spy.

The scandal has thrown the US$4-trillion chipmaker into a deep crisis, rattled the artificial intelligence industry and prompted congressional inquiries into how senior Trump administration officials – including Commerce Secretary Howard Lutnick – handled the American company’s chip sales to China.

The market fallout: Since Nvidia’s board announced on Sunday that it was launching an investigation into the reported affair with the alleged spy, the company has lost as much as $600-billion in stock market value.

It’s possible Huang’s departure couldn’t have come at a worse time, Joe Castaldo and Murad Hemmadi write. Stocks tied to AI development had been sliding even before the Nvidia scandal, reflecting some investors’ and analysts’ concerns about the massive spending on data centres to fuel AI development and the financial returns needed to justify it.

And John Rapley wonders whether Nvidia’s tangled political and corporate webs could bring the whole market down with it. “It’s hard to overstate just how central to the AI boom Huang was,” he says.

Nvidia shares continued their run of daily losses yesterday, but retail investors seeing an opportunity to “buy the dip” helped prop up the stock.

The affairs: U.S. media reported Huang had been intimate with Alice Huang, an executive at Singaporean company Megaspeed International, who U.S. authorities had determined was an asset for Chinese intelligence.

The New York Times reported this week that Jensen Huang also had an affair with Kimberly Powell, Nvidia’s vice-president of health care. Yesterday, Reuters reported he had a relationship with a second employee.

Writing in The Globe, science policy researcher Kean Birch asks an interesting question: Why do investors care who Huang sleeps with? A snippet: “It relates directly to the increasingly vibe-dependent nature of our economies.”

Lutnick under pressure: U.S. Senate Banking Committee Chairman Tim Scott sent letters yesterday to Commerce Secretary Howard Lutnick and Huang asking them to testify over the developments.

A growing number of lawmakers have criticized Lutnick for the administration’s refusal to add dozens of Chinese companies to a key U.S. trade blacklist, and over whether the government was properly overseeing Nvidia’s exports to China.

Senior White House officials are reportedly discussing whether to oust Lutnick, who is shaping up to be a leading contender for America’s next top scapegoat.

Lutnick has played a central role in the U.S. trade war with Canada. In August, The Globe reported he derailed a prospective trade deal, pushing harsher terms than his own country’s chief negotiator.

The legal squeeze: There are a few ways this could show up in courts. A proposed class action filed in a California federal court this week alleged the company and Huang defrauded shareholders by concealing the relationship with an alleged Chinese spy.

The U.S. Securities and Exchange Commission could investigate to determine if Nvidia made false or reckless disclosures that misled investors.

Also this week, an investor filed a “derivative lawsuit” seeking to hold the board liable for allegedly breaching its fiduciary duties and failing to make a good-faith effort to oversee the business and Huang.

Who’s up next? Chief financial officer Colette Kress will lead the company on an interim basis, Nvidia said yesterday.

U.S. President Donald Trump stumped for Tim Cook, the former CEO of Apple, to pick up the mantle.

“NOW THAT Nvidia CEO JENSEN HUANG, who has done a fantastic job, has resigned, there is only one man to take his place – TIM COOK of Apple. A Legend replaces a Legend!” Trump wrote on Truth Social.

I don’t understand how he decides WHAT to CAPITALIZE in his dispatches, but my theory is he has a reverence for NOUNS.

With reports from Reuters

Top stories

Outlook down: Thousands of people around the world reported a widespread outage of Microsoft applications.

In posts to social-media platform X, Microsoft said the issue with its network began around 11 a.m. ET yesterday, acknowledging widespread issues related to “elevated load” on certain servers. In one of its most recent posts, the company said it restarted affected servers, though that had not yet “provided the anticipated relief.”

The effects of the outage highlight the risks associated with widespread reliance on a single technology provider, Irene Galea reports.

In general, maybe we ought to stop putting all our eggs in one basket.

Upset Ottawa: Industry Minister Mélanie Joly has given Stellantis NV 30 days to reverse the sale of its auto plant in Brampton, Ont. Failure to do so, Eric Atkins reports, could see the federal government take Stellantis to court to recoup the money Ottawa advanced the company to refit the factory.

A meeting yesterday between Joly, officials from Stellantis, the province of Ontario and the Unifor union failed to convince the automaker to cancel the sale, announced on Monday.

Lana Payne, Unifor’s national president, expressed frustration that recent meetings failed to convince the company to change course. “We are in the same place,” Payne told reporters. “The company has sold the plant.”

Quoted

Doomsday averted: Humanity will not end today, despite a highly regarded mathematician’s oddly specific 1960s prediction of “mass squeezing”

Up next

More files we’re following

Before the bell: We’re taking deep breaths! The Nvidia story will surely hang over investor sentiment. Earnings from Toronto-based private equity firm Onex will give us a measure of deal-making and credit markets.

Building a country: Canada’s manufacturing and wholesale sales reports for September are widely expected to show the economy grew less than expected in the third quarter.

Morning update

Global markets were muted after a volatile week that stoked fears about the AI trade following the turmoil at chip heavyweight ⁠Nvidia.

Wall Street futures edged up, while TSX futures were little changed.

Overseas, the pan-European STOXX 600 was up 0.12 per cent in morning trading. Britain’s FTSE 100 rose 0.12 per cent, Germany’s DAX gained 0.17 per cent and France’s CAC 40 climbed 0.14 per cent.

In Asia, Japan’s Nikkei closed 0.53 per cent higher, while Hong Kong’s Hang Seng fell 1.55 per cent.

The Canadian dollar traded at 70.09 U.S. cents.