U.S. stock futures fell Thursday after reports that Nvidia's board was weighing the removal of CEO Jensen Huang, unsettling investors in the artificial intelligence trade. Nasdaq 100 futures dropped 0.86% and S&P 500 futures lost 0.4% by early morning, while Dow futures held slightly higher, according to Reuters and other outlets.

Why are Nvidia shares falling?

Nvidia shares tumbled in premarket trading after reports of a second extramarital affair involving Huang, its longtime leader. The drop was put at 7.7% by Reuters and 8.6% in after-hours trading by the Associated Press, while Yahoo Finance cited 5.6%.

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According to the AP, Huang's affair with a Chinese woman has raised national security concerns in the United States. The board met late Wednesday to discuss the situation, and the uncertainty over who might succeed him has spread to the wider market.

How is the AI sector reacting?

The turmoil hit companies tied to the AI economy. Intel, Marvell Technology and Micron fell between 2.7% and 3.5%, AI infrastructure firm CoreWeave dropped about 7%, and data-center names IREN, Applied Digital and Core Scientific also traded lower. Nvidia rivals AMD and Broadcom rose 2.3% and 1.4%.

The declines threatened to erase Wednesday's gains, when strong CoreWeave results had helped AI stocks recover. "The controversy creates an unusually difficult problem for investors," said Terri-Leigh Bennett of CMS Prime, according to Reuters.

What to watch next

Investors are awaiting Friday's Producer Price Index reading, which could shape inflation expectations after consumer prices rose more than expected earlier this week. Some analysts see the pullback as a buying opportunity. "We don't see capital expenditure on AI slowing down," Strategy Asset Managers CEO Tom Hulick told Reuters. Anthropic's planned public debut next week is another test for AI sentiment.

FAQ

Is Jensen Huang still Nvidia's CEO?

The board was meeting to decide whether to oust him, so his status remained uncertain as of Thursday morning.

Did all chip stocks fall?

No. Intel, Micron and Marvell declined, but Nvidia rivals AMD and Broadcom gained.