Major stock indexes declined at the opening bell on news that Jensen Huang, one of the most important executives in the AI boom, was resigning effective immediately as CEO of Nvidia. Shares of Nvidia sank 12% at the open, as the company and its investors grappled with multiple scandals that have engulfed its founder and now-former CEO, Jensen Huang. The stock recovered somewhat but still traded down more than 6% as of 10 a.m. ET.In early trading, the company was the biggest decliner for both the Dow Jones Industrial Average and S&P 500. The tech-heavy Nasdaq Composite index fell 0.5%, while the S&P 500 slipped 0.3%. The Dow was essentially flat.Without a formal succession plan, the company that designs the chips powering the entire AI sector, was thrust into crisis. It’s a pivotal moment for AI, with Anthropic gearing up for its potentially trillion-dollar-plus initial public offering next week.Nvidia named its longtime chief financial officer as its interim leader. Huang’s departure from Nvidia came after a New York Times report that said he had a relationship with an executive at Nvidia who reports to him.That came right on the heels of his admission on Jattvibeday that he was “unfaithful” to his wife, an announcement that was released after the FT reported on Saturday that Huang had an affair with a woman whom a source told Jattvibe News was a Chinese spy.There are few companies as important to the artificial intelligence industry as Nvidia. “We’re probably the only AI company in the world that works with every AI company in the world,” Huang told Bloomberg in an October interview.As reports swirled about Huang this week, Nvidia’s shares have plunged, erasing about $830 billion in value. Nvidia’s total market value has fallen below $4 trillion for the first time since 2025.The news surrounding Huang, a confidant of President Donald Trump’s, also raises the prospect of tighter regulations on the chip and AI industry, which could further pressure stock indexes which have been powered for years by the explosion in AI stocks.“All told, given the national security concerns, we think the risk of more restrictive guidelines on shipments directly or indirectly into China has risen,” JPMorgan analysts said on Thursday before Huang was removed. Industry experts widely believe that American leadership in AI has been powered by Nvidia. That too could come into question.“We expect the [Nvidia] team to maintain its leadership in AI,” said JPMorgan’s team, while adding that “history has shown that one execution misstep often leads to more.”“Maintaining flawless execution” will be critical to Nvidia and the sector going forward, they said. Also pressuring stock indexes was news from AI cloud startup Nebius, which reported that it beat earnings expectations. But the company also gave investors disappointing guidance. Investors have been on edge about AI-linked firms, especially smaller startups, given that they require tens of billions of dollars to get their data centers up and running. Overall, the sector has poured hundreds of billions of dollars into developing AI systems, data centers, and equipment, but investors remain nervous about how soon those investments could pay off. Nebius shares plummeted almost 20%. Its peer, CoreWeave, also fell 10% after surging Wednesday. Together, the Nvidia and Nebius news sent the entire tech sector lower and it was the worst performing S&P sector on Thursday. Suppliers to both companies also fell. The Philadelphia semiconductor index fell 2%, while an ETF that tracks memory suppliers fell 4%.