Jensen Huang’s departure blasts big hole in AI startup funding, VCs and founders say

Jensen Huang has officially stepped down as Nvidia's CEO after co-founding and leading the chipmaker for 33 years, and the reaction across the startup world was immediate. "It's like a bomb went off," one neocloud founder told TechCrunch upon hearing the news. Huang was a singular force in AI venture capital, and his exit removes one of the ecosystem's most reliable sources of capital at a moment when much of the sector depends on it.

The money flowed hardest into the capital-hungry layers of the stack: neoclouds, inference providers, and open-weight model developers. Nvidia backed CoreWeave while it was still private and participated in two Crusoe rounds, including a $1.4 billion Series E. It has agreed to buy Hugging Face for $13 billion, expected to close in 2027, and holds positions in Mistral AI, Lambda, and Black Forest Labs. Nvidia also wrote an $800 million check into Reflection AI's $2 billion Series B before the open-source startup had meaningful revenue, the Wall Street Journal reported. "Jensen's initiatives are a big reason an ecosystem has emerged" given how expensive these systems are to build, said Zain Javid, co-founder of hardware company Ghost.

Colette Kress, Nvidia's interim CEO, is expected to adjust the company's investment posture, particularly around startups at the center of the multi-billion-dollar data center build-out — a dealmaking spree that has already drawn Wall Street scrutiny. "She's much more conservative," one investor said of Kress. "I don't think she's going to commit the same amount of money to keep the early-stage ecosystem going." Investors are hopeful a permanent successor eventually resumes the pace, but few expect that to happen soon.

The ripple effects may be sharpest outside the United States. Bankiya noted Huang's willingness to fund open source and Europe in particular, saying the end of that support in regions beyond America "would be a massive funding and honestly ecosystem gap that no one can fill." What remains open is whether Nvidia's board installs a successor willing to preserve Huang's check-writing, whether Kress curtails the largest data-center-adjacent bets first, and which funds step in to fill rounds that previously needed Nvidia's lead to clear.