• Nvidia CEO Jensen Huang resigns.
• Nvidia CFO Colette Kress and its first-ever board chair Harvey Jones are now in charge.
• Anthropic’s IPO demand was poised to exceed expectations—before the Nvidia bombshell.
• United Airlines blocks agents from booking flights.

Before we get to the news, can I just say, you are not going to want to miss this year’s edition of Fortune Brainstorm AI San Francisco.

We have an exceptional line-up of speakers for you: OpenAI president Greg Brockman and Microsoft AI CEO Mustafa Suleyman will both be onstage. Once the closest of partners, their two companies are increasingly, competitors, so I’m eager to hear how differently they see the road ahead. AI pioneers Fei-Fei Li, now of World Labs, as well as Andrew Ng, now of LearnVector, will be discussing their view of AI’s future too. Palo Alto Networks CEO Nikesh Arora will talk about AI and cybersecurity. Greylock partner Reid Hoffman, CapitalG’s Jill Chase, and Kleiner Perkins’ Mamoon Hamid and Ilya Fushman will weigh in on where the money is going. Recursive Superintelligence’s Richard Socher will talk about RSI and automating AI research.

Plus, we’ve got Nick Fox from Google. We’ve got Fireworks CEO Lin Qiao. We’ve got Cerebras’ Andrew Feldman, Vanta’s Christina Cacioppo, Unconventional AI’s Naveen Rao, Brex’s Pedro Franceschi, Maven Clinic’s Kate Ryder, Box’s Aaron Levie, Atlassian’s Mike Cannon-Brookes, New Work Foundation’s Clara Shih, Twilio’s Khozema Shipchandler, Rubrik’s Bipul Sinha, Harvey’s Winston Weinberg, Dynamic Creatures’ Marc Theermann, SendCutSend’s Jim Belosic, Apptronik’s Jeff Cardenas, Accenture Song’s Ndidiamaka Oteh, and Senra Systems’ Jordan Black. It’s going to be epic. So please join me and many of my Fortune colleagues at the St. Regis in San Francisco on December 7th and 8th. You can apply to attend here.

Jensen Huang’s abrupt resignation as Nvidia CEO may be the biggest story in AI we’ve seen since the launch of ChatGPT almost exactly four years ago. Not only because it’s a stunning, swift downfall, but also because it’s the end of the first major phase of AI development as we’ve known it. At Fortune, we’ve been following the story closely over the past two days. You can check out our coverage by following the links in the “Fortune on AI” section of this newsletter.

It turns out, one man might just be able to single-handedly pop the AI bubble by not keeping it in his pants, with not one but three affairs—at least that we know about so far. But in all seriousness, this is a sad story. It’s a visceral betrayal for Huang’s family, his wife of 41 years, Lori, and their two children, both of whom work at Nvidia.

Huang has disappointed just about everybody in his orbit, from shareholders to customers, to people who held him up as a role model. Martin Casado, an investor at the prominent firm a16z called today a “dark, dark day,” and a “horrible decision for the U.S. and the western world.”

“It’s very sad by every dimension,” Penny Herscher, a longtime executive in the semiconductor industry, told me today. “It’s sad for his family, for the employees, for the customers. Jensen’s a remarkable person, and it’s sad to see such a remarkable person in this horrible situation—self-inflicted, but horrible.”

“I am extremely sad today as I see Nvidia without Jensen Huang,” one Nvidia employee posted. Several others have made similar public remarks.

My hunch is Nvidia will prevail, given the immense amount of money and geopolitical stability hanging on the health of its GPU business. But there will likely be a period of uncertainty, both in the boardroom and in Washington. America’s position at the top of the AI industry hangs in the balance, and stricter regulation may be more likely, especially given the Democratic Party’s sweeping midterms wins. As Jeremy Kahn wrote in Tuesday’s edition of Eye on AI, Huang had been a leading voice opposing both U.S. export controls on AI technology and government regulations on open models, and now that community has lost their main champion.

“This whole thing sucks, and I wish none of it had happened. It’s a really sad day!” posted Clement Delangue, CEO of Hugging Face, the open source repository Nvidia acquired for nearly $13 billion in September. “But I want to make one thing clear: we’ll keep fighting for open-source AI, harder than ever. This is too important to slow down now. Let’s go!”

There is much more to the story yet to unfold. Huang has agreed to appear before Congress. More investigations are likely to ensue. Meanwhile, rumors are swirling that Anthropic CEO Dario Amodei may have orchestrated Huang’s downfall. Amodei has warned that open models can serve as uncontrolled weapons that bad actors can harness to incur serious societal harm, and is in favor of industry-wide slowdowns. I’m not quick to believe that theory, mostly because there is not yet any proof, but also Anthropic had every incentive to wait until after its IPO if it was going to take down Huang. The dark cloud his ousting has cast over the AI industry threatens Anthropic’s valuation as investors enter arguably the greatest period of instability we’ve seen yet in AI.

“My expectation is a 10–15% valuation haircut, potentially approaching 20% if Nvidia’s leadership crisis raises doubts about its $10 billion anchor commitment,” Jonathan Tower, managing partner at the VC firm Catapult, tells Fortune. “Anthropic’s underlying business hasn’t changed overnight, but investor confidence has. I expect the anchor to hold, but investors will demand a greater margin of safety. The larger question is whether this marks the beginning of a broader repricing of AI risk.”

The big unknown is how the stock market will react. Nvidia shares are trading down 4% at the bell today, a modest dip.

As far as silver linings go, there will be a few winners to come out of Huang’s downfall. Nervous Nvidia customers could place bigger orders with other chipmakers, such as Google, Amazon, AMD, and Broadcom. Another winner could be Nvidia’s next CEO, who stands to score the role of a lifetime, and perhaps propel the company into a new and even more successful era. That search is already underway. But given the allegations against Huang at this time, particularly that he may be complicit in funneling chips to China via Megaspeed, the shell company helmed by his paramour Alice Huang—there could always be more executives involved.

The biggest story in AI since ChatGPT is far from over.

With that, here’s more AI news.

Emily Forlini
emily.forlini@fortune.com
@emilyforlini

FORTUNE ON AI

Nvidia's Jensen Huang resigns, CFO Colette Kress named interim CEO—by Sebastian Herrera and Amanda Gerut

AI industry execs brace for future without leading hype man, Nvidia’s Jensen Huang—by Beatrice Nolan, Allie Garfinkle, and Jeremy Kahn

Nvidia's new chairman Harvey Jones is a 'charming elder statesman' set to lead the search for the next CEO. But did he enable the current crisis?—by Emily Forlini

Nvidia’s next CEO: The outside contenders to succeed Jensen Huang—by Sheryl Estrada

Jensen Huang's downfall cut the P/E of Nvidia stock by a third. But don't call it a bargain yet—by Shawn Tully

Why Nvidia turned to 'strategic' CFO Colette Kress to clean up Jensen Huang's mess—by Emma Hinchcliffe

36 direct reports, no heir apparent: How Jensen Huang's 'flat' org may have hampered Nvidia's succession planning—by Phil Wahba

Anthropic’s blockbuster IPO just got harder after Jensen Huang’s dramatic exit as Nvidia CEO—by Beatrice Nolan and Allie Garfinkle

AI IN THE NEWS

Anthropic launches Claude for manufacturing. A new plugin will help optimize production lines, and could help factory owners bridge their labor shortages, Anthropic says. It's launching with 17 skills. Read more here from Business Insider.

United Airlines bans AI agents from booking flights on behalf of travelers. On Wednesday, the airline said it is restricting unauthorized third-party agents from its platforms and indirectly through travel agencies and aggregators, citing account security, unintended transactions and regulatory concerns. It’s a new obstacle for assistants such as Dots, Muse, and Instinct. Read more here from CNBC.

A flurry of AI launches from Google. Google may not be dominating AI headlines lately, but its teams are quietly cooking up new products. In the past few days, Google debuted a DNA sequencing model, the Gemini Decisions API aimed at classification and other bounded choices rather than generating long answers, and a Gemini 4 Hydrogen model "built for rapid execution across diverse agentic workflows." Will any break through to the mainstream?

EYE ON AI NUMBERS

3

Number of affairs Jensen Huang has reportedly had, one with an alleged Chinese spy, Alice Huang, and two with Nvidia employees, including Kimberly Powell, Nvidia’s vice president of health care (per the New York Times), and another who is not yet known (per Reuters). Also, Jensen Huang helmed Nvidia for 33 years.

AI CALENDAR

Nov. 16-17: Fortune 500 Innovation Forum, Detroit. Apply here to attend.

Nov. 18-19: Slush, Helsinki, Finland.

Dec. 6-12: Neural Information Processing Systems (Neurips) conference. Sydney, Australia.

Dec. 7-8: Fortune Brainstorm AI, San Francisco. Apply here to attend.