‘No further investment without Jensen’: Billionaire stops buying Nvidia as Elon Musk and top fund managers rally behind former CEO Jensen Huang

Huang, who co-founded Nvidia in 1993, resigned as president, CEO and board member effective immediately, Nvidia announced Nov. 12. The board accepted his resignation Nov. 11, according to a regulatory filing. CFO Colette Kress is serving as interim CEO, and the board said Nov. 13 it was still choosing a search firm to find a permanent replacement. Huang himself has been involved in that search and has personally contacted at least one potential candidate, The Washington Post reported, citing people familiar with the matter. His exit followed reports of extramarital relationships, including one with a former Megaspeed executive who U.S. intelligence officials reportedly suspect was recruited by China’s top spy agency. Beijing has denied she is a spy.

KoGuan is far from the only big name in Huang’s corner. Tesla and SpaceX CEO Elon Musk has signed on to a petition to bring Huang back, joining 100,000+ names and KoGuan himself. Two heavyweight fund managers, whose names also appear on the petition, have asked the board to pump the brakes in a formal letter.

Here’s why the money crowd is so rattled — and why the risk for shareholders may not end with who runs the company.

‘The supreme creator’: The big money in Huang’s corner

KoGuan hasn’t been subtle. On X, he called Huang “the supreme creator” and said he hopes to invest in any new company Huang starts or buys.

That’s a change of pace for an investor who was loading up earlier this year. In March, KoGuan said he’d doubled his Nvidia stake to 2 million shares.

Two of Wall Street’s best-known tech investors are taking a more measured line. On Nov. 13, Altimeter Capital CEO Brad Gerstner and Atreides Management’s Gavin Baker sent a joint letter to Nvidia’s board.

Their ask was narrower than the petition’s: “a slow, measured, and deliberate process regarding the future leadership of Nvidia that leaves all options on the table, including the potential return of Jensen Huang.”

“There are more questions about recent events than answers,” they wrote, adding that the board “should avoid a rush to replace Jensen that undermines and thwarts the best interests of shareholders.”

They also conceded the final call isn’t theirs. If the board decides Huang’s return isn’t in shareholders’ best interest, “that is the Board’s prerogative,” the letter says.

The support started before Huang resigned. On Nov. 8, Pershing Square CEO Bill Ackman wrote on X that Huang “is an incredible human” and that “we should all support him and his family.” He added that he wasn’t suggesting Huang get “a free pass.” Binance co-founder Changpeng Zhao called it a mistake for Nvidia to let Huang go.

What the stock has done

Shareholders have had a rough few weeks. Nvidia has fallen more than 30% from its record high on Oct. 6, erasing more than $1.7 trillion in market value, according to CNN. Part of that slide came before the scandal broke, during a broader selloff in AI stocks after the midterm elections. Shares slipped again on Friday, capping the stock’s sixth straight weekly decline and its longest losing streak since 2012.

On the day Huang resigned, shares fell more than 10% intraday before closing down 4.3%. Bernstein and KeyBanc have since downgraded the stock. On Thursday, it traded at about 12 times expected earnings, its lowest valuation since 2012, according to Reuters.

Musk has pointed to a business risk, too. In a post on X on Saturday, he warned that Nvidia would lose “critical” deals without Huang, saying that while Huang drove the supply chain “brilliantly,” many of those deals were “a handshake with Jensen, not a written contract.” Musk isn’t a neutral observer, though. His rocket and AI company, SpaceX (NASDAQ:SPCX), is a major Nvidia customer, and Nvidia owns a stake in SpaceX worth billions.

Not everyone is heading for the exits. Retail investors poured about $1.6 billion into Nvidia shares over three days this week, Business Today reported, citing market data. Some insiders cashed out well before the turmoil, though. Nvidia director Mark Stevens, the company’s largest individual shareholder after Huang, sold about $946 million of stock in late August and September, according to SEC filings. He still holds about 27.5 million shares.