Israel’s VCs see opportunity for challengers in Nvidia’s turmoil

Jensen Huang's resignation as Nvidia CEO has rattled Israel's tech ecosystem, where the company has been described as a "second home" since Huang coined the phrase in 2023. Nvidia's centrality to AI — its GPUs underpin both training and running large language models — means the country's startup scene is watching the leadership crisis closely, even as some see an opening for challengers to Nvidia's dominance.

Nvidia's footprint in Israel traces directly to Huang's dealmaking. He drove the $6.9 billion acquisition of Israeli chipmaker Mellanox in 2019, then built the company's largest R&D facility outside the U.S. on that base, with plans for a multibillion-dollar campus in northern Israel. Beyond the roughly 6,000 locals Nvidia employs, the company's presence has provided a measurable lift to Israel's economic forecasts. Intel, Microsoft and many homegrown startups also run significant R&D operations in the country, but Nvidia's position in AI has made it a singular concern.

Succession is the variable locals are parsing hardest. Interim CEO Colette Kress may not hold the role long term, and in a 2023 interview resurfacing on X she said that as CFO she typically began her day with Israel meetings before turning to California. Among the floated candidates for the permanent post are two Israelis — Apple's Johny Srouji and Nvidia's Michael Kagan — though neither sits at the top of the tentative list. "Jensen brought Nvidia to Israel with the acquisition of Mellanox, so there is a strong positive sentiment towards Nvidia and Jensen in Israel's tech community," repeat cybersecurity entrepreneur Pavel Gurvich told TechCrunch.

Israeli investors are framing the opportunity as conditional. Yanai Oron, a general partner at Vertex Ventures Israel, argued that slower decision-making at Nvidia could hand competitors an opening — but that if uncertainty also dampens AI spending, those rivals could capture a larger share of a smaller market. Adi Levanon, founder and managing partner at Selah Ventures, was blunter: Huang's departure doesn't dismantle Nvidia's technology or ecosystem, but it may give competitors more room to shape what comes next. Under Huang, Nvidia deployed its cash reserves aggressively across the AI spectrum, backing companies and funding its own next-generation chips — an empire that doesn't collapse with its architect, but may be less likely to harden into a full monopoly.

The open questions for builders and investors now center on three fronts: whether Huang's successor can sustain Nvidia's spending cadence across startups and silicon; whether a looser grip on the industry lets AMD, Intel and Israeli chip startups gain ground in accelerators; and whether Nvidia's Israel commitments — the R&D hub, the northern campus — survive a change in leadership. Oron's framing sets the stakes: a bigger share of a smaller opportunity is a very different prize than the one currently on the table.