Jensen Huang’s Downfall Is a Sign of Silicon Valley’s Power Drain

The chorus of support among the tech elite for Nvidia’s co-founder underscores seismic shift of power under way within the industry

The inevitability—the invincibility—of Big Tech felt diminished Thursday with Jensen Huang’s ouster from the company he founded and built into the backbone of the AI boom.

As his power slipped away at Nvidia NVDA -2.12%decrease; red down pointing triangle, the court of tech royalty was being dealt an uncomfortable truth about their new place in the world: Big Tech isn’t so big anymore nor, perhaps, so unbeholden.

In the span of a little more than a week, the titans lost their grip on political power in Washington, D.C., followed by one of their biggest stars.

Huang’s resignation threatens the AI boom he helped propel. WSJ’s Amrith Ramkumar talks on the ‘Tech News Briefing’ podcast about what’s next as lawmakers push for investigations. PHOTO: CHUNG SUNG-JUN/GETTY IMAGES
Now, being a founder is no longer enough. Silicon Valley is seeing the return of big bureaucracies, institutional powers and old norms that this cohort has spent a lifetime chafing against and some—including, most notably, Elon Musk—bet the Trump administration could dispatch.

This rude awakening was evident in the messages of support for Huang that many were putting out late Wednesday ahead of his official resignation announcement, even as more troubling allegations emerged. Some thought Nvidia shareholders should vote on Huang’s future while others advocated for allowing enough time for proper investigations to conclude.

“Seems ill advised for Nvidia’s board to oust Jensen Huang given how central his leadership is to the operations of an engine of our future abundance,” Garry Tan, head of startup accelerator Y Combinator, posted on X Wednesday.

To some, the response of tech leaders rallying around Huang, who has acknowledged having an affair with a woman suspected of spying for China, was indicative of the cultural rot within tech that has become obsessed with winning at any cost.

“Even after more allegations were coming out…the first instinct of these leaders was to circle the wagons and just defend him—that is not a good set of instincts, and it’s not going to work anymore in the new political reality,” said Dex Hunter-Torricke, who once worked for Musk and Mark Zuckerberg. He has since pivoted toward founding the Center for Tomorrow, a nonprofit aimed at helping society prepare for AI.

Their defense of Huang is understandable, though. For certain tech leaders, his departure means losing a valuable personal relationship with a man capable of making or breaking their artificial-intelligence ambitions. Such a reshuffling of the deck causes even more uncertainty at a time when a company having computing power provided by Nvidia is the signal to many investors of its relevance and potential.

That Huang—who savvily positioned Nvidia at the heart of the AI boom and, in turn, made it one of the most valuable companies in the world—would resign so quickly is a blow to the widely held belief in Silicon Valley of the importance of the modern-day founder.

“You’d think we’d have learned from Steve Jobs and Travis Kalanick that one does not just simply replace the founder…” Naval Ravikant, AngelList co-founder, posted on X. To which Musk replied: “True words.”