The International Monetary Fund (IMF), a global organisation that monitors the world economy, is observing volatility in AI stocks following Nvidia CEO Jensen Huang’s resignation. It says it is too early to determine whether investors are reassessing the sector’s long-term prospects.
IMF spokesperson Julie Kozack told a press briefing that AI valuations remain vulnerable.
“We, of course, are closely monitoring the most recent developments and their impact on equity markets, the economy, and financial stability, but at this point it’s really too early to say whether there’s going to be some broader reassessment of investment in AI technology and any broader reassessment of profitability and future productivity gains,” Kozack said.
Nvidia shares fell sharply on Thursday, pulling down the S&P 500 and Nasdaq, while some rivals, including AMD, Alphabet and Microsoft, rose.
Kozack also said AI investment and data centre construction were among the two major contributors to US inflation, alongside higher energy prices linked to the Iran war.
All the fault strongly shouldered on the FACT that US cannot tolerate a Chinese face amongst its top echelon of key personnel, especially within the big tech sectors.
ReplyDeleteThe current CEO of Intel, Broadcom, should take heart. U pledge yr whole-hearted allegiance, yet, U can never ever be part of that land of milk & honey. The WASP occupiers of that land WOULD never allow that to prolong any longer than the distance of their nose tip.
Many have cautioned, about ousting the founder of a company and replacing with professional managers, citing Steve Job and Apple, Uber and another.
ReplyDeleteThe view is, this potentially can create a super company under Musk SpaceX, Tesla and TeraFab, should Old Huang decide to take up a fellow maverick's offer, challenging even the mighty TSMC...
Btw, watched out on all the data centre projects in MY and SEA, and its geopolitical rammification. Wondering whiich MY tycoon or bigshots start to sweat bullets. The royalty of a southern state probably won't feel anything unless it is left hanging the bag, then taxpayers, mari-mari..
https://x.com/wushanyunyu1/status/2120912947157348736
Less than a day after Jensen Huang stepped down, Elon Musk has already publicly sent out three overtures.
First, the facts.
1. On November 8, Sequoia Capital partner Maguire posted that Jensen is one of the most outstanding entrepreneurs of this generation and irreplaceable to America's AI leadership. Musk reposted it and replied with just two words: I agree.
2. Investor Gavin Baker said Jensen's departure or stay should wait until the investigation is complete and shareholders vote. Musk replied: Indeed.
3. Today, financial account ZeroHedge called out directly: Elon, please hire Jensen. Musk himself replied: That would be an honour.
4. Musk happens to have a big project in need of a leader: the Terafab chip plant jointly built by Tesla and SpaceX, with Phase 1 already under construction in Texas at a cost of $16.8 billion. On November 6, investor Baron estimated on the spot that the total cost would be $1 trillion. Musk said it probably would be, with a target of 1 million wafers a month by 2032.
5. In Nvidia's resignation announcement this morning and the filing with the SEC, there is not a word about non-compete, severance, or an advisory role.
Facts laid out, now let's project forward.
First scenario: the role is a fit. What Terafab lacks isn't money, but someone who can take chips from blueprint to mass production and still command the room. Among the handful of people in the world who could do it, Jensen ranks first—he built the GPU line himself. Musk has sent out three overtures; the gesture is already complete.
Second scenario, and the most important one: once Jensen's joining is officially announced, how do the two stocks move?
SpaceX (SPCX) moves first, with more upside than Tesla. Terafab is nominally a joint build by the two, but the compute story is mainly on SpaceX's side—its Q3 AI revenue was $7.6 billion, up more than 9x year over year, and the orbital data centers are counting entirely on in-house chips. Jensen joining is like giving that story a chief engineer. There's already a hint of it in today's trading: SPCX is up 2.7%, Tesla is basically flat.
The size of the move depends on the title. If he takes the helm of Terafab full-time, both stocks have to rise, with SPCX leading. If it's only an advisory title, it will most likely spike and fall back—the market has seen plenty of celebrity endorsements. Nvidia is the mirror image: Broadcom is up 5.2% today, already previewing the pricing of "Jensen leaving" once. If he actually goes to a rival, that's a second wave, and what's lost isn't just the person, but customers' confidence in the roadmap.
A cold splash of reality, as usual: Terafab's first test chips won't arrive until mid-2027, and mass production is even later. An official announcement prices in expectations; after that, it has to deliver on engineering milestones. Besides, Tesla's $1.5 trillion and SpaceX's $1.94 trillion valuations are sitting right there, and one person can only push the stocks so far. Add to that the fact that merger talks between the two aren't settled, and on the day of a real announcement, the stocks may price in the merger first, not Jensen.
So I've laid out the sequence for this: first watch whether Nvidia's board uses the non-compete as leverage, then look at the title Musk offers, and only lastly the stock price. On the 17th earnings call, this question can't be dodged.