The Nvidia episode will not have any impact on India, while the country's IT sector could emerge as a beneficiary, government sources told NDTV Profit. They noted that the AI bubble was bound to burst at some point and suggested that Google and its AI ecosystem could gain greater strategic importance.
These remarks come as Nvidia lost around $470 billion in two days as investors assessed investigation involving CEO Jensen Huang and his alleged personal relationship with a businesswoman reportedly having links to Chinese intelligence.
Nvidia board also initiated an independent investigation into whether its CEO was targeted by a foreign intelligence operation. Additionally, Huang has acknowledged in an email to employees that he had been unfaithful to his wife, but did not address allegations concerning Alice Huang's intelligence links. The company showed confidence in Huang, and said it has no reason to believe that company secrets or US national security were compromised.
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Monday and Tuesday's sell-off has also resulted in Microsoft overtaking the AI chipmaker to become the world's second-most valuable company. Nvidia shares closed at $168.8 on Nov. 10, down $9.8744, or 5.53%, from the previous close of $178.67 on Nov. 10 and $186.64 on Nov. 6, on Nasdaq. Its market capitalisation stood at approximately $4.07 trillion. The correction also came as investors reassess the sustainability of massive artificial intelligence infrastructure spending and the returns expected from the sector. Nvidia's next quarterly results, scheduled for Nov. 17, will provide another reading of demand for AI chips and the outlook for its business.
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