Nvidia crisis reverses AI rally, shares fall 6%

The reversal of the AI-led rally comes as investors are already questioning the sustainability of the AI trade. Growing tech-sector borrowing, circular financing, and doubts about whether revenues can keep pace with historic capex plans have been weighing on sentiment, making the market vulnerable to bad news. The crisis at Nvidia, recently the world's most valuable company, delivered that blow. The company sits at the center of the AI ecosystem, so its troubles quickly spread to key chip suppliers in South Korea and Taiwan, whose markets fell alongside Nvidia's 6% premarket decline. One analyst told Bloomberg that the potential ouster of Nvidia's CEO is an unequivocal negative for Nvidia and the entire AI ecosystem, describing him as the architect of the AI infrastructure. That view suggests the selloff may reflect deeper concerns about leadership stability at the heart of the AI buildout.