Nvidia succession opens a window for AI chip challengers

By Grace Kim

Nvidia paid $6.9 billion for Mellanox in 2019 and now employs 6,000 people in Israel. Mellanox became the base for Nvidia’s largest R&D facility outside the United States. The company has also planned a multibillion-dollar campus in northern Israel.

The purchase and Mellanox-based R&D operation are in place. The 6,000-person workforce is current, while the northern campus remains a plan rather than an operating facility.

What does Huang’s resignation change in Israel?

Jensen Huang’s resignation has drawn worry across Israel, which he described as Nvidia’s second home in 2023. Nvidia’s expansion has supported the country’s economic forecasts in recent years.

Intel and Microsoft conduct sizable shares of their R&D in Israel. So do many homegrown startups. The relationship now carries a commercial question for both sides. It is whether Nvidia will maintain its commitment to the country.

Pavel Gurvich, an Israeli repeat cybersecurity entrepreneur, said Huang brought Nvidia to Israel through the Mellanox acquisition. He said the deal created strong positive sentiment toward both Nvidia and Huang in Israel’s technology community.

Supporters of continued investment and those wary of it are watching the succession with equal attention. The outcome could shape future research spending and capital commitments at a company whose local expansion has become material to Israel’s broader technology economy.

Who could succeed Huang?

Colette Kress, now interim CEO, said in a 2023 X interview that, as CFO, she typically started her day “with Israel meetings, and only then continue[d] to California.” She may not remain chief executive for long.

Apple’s Johny Srouji and Nvidia’s Michael Kagan have also been floated as candidates. Both are Israelis. Neither sits at the top of the still-tentative list, and no permanent appointment has been announced.

Whichever candidate Nvidia selects will likely command less influence over the company and the wider technology industry than Huang did. Investors do not expect that handover alone to erode demand for Nvidia’s products.

Can slower decisions create an opening?

Nvidia has accounted for a vast share of global AI spending. Under Huang, it used cash reserves to invest massively in outside companies and its own next-generation chips.

Nvidia’s market position may survive Huang’s departure, although the company appears less likely to become a full monopoly. The question is whether rivals can convert that uncertainty into sustained customer demand.

Yanai Oron, a general partner at Vertex Ventures Israel, said: “slower decisions at Nvidia could give competitors an opening, but if that uncertainty also slows AI spending, they could end up with a bigger share of a smaller opportunity.”

That warning defines the commercial trade-off. Slower decisions could make rivals more competitive if AI spending keeps expanding. The same uncertainty could delay purchases and leave those rivals with a larger share of a smaller market.

Can challengers turn the opening into share?

Adi Levanon, founder and managing partner at Selah Ventures, said Huang’s departure does not dismantle Nvidia’s technology or ecosystem. It can give competitors more room to shape what follows.

Companies worldwide are putting increasingly demanding AI agents into their workflows. Israeli investors see the opening. Venture capital has flowed toward developers of AI-specific chips and inference software that could compete with Nvidia.

Nvidia’s GPUs remain central to training large language models and using them. That central role gives challengers room at the margin, but it does not erase Nvidia’s position in the AI infrastructure market.

Levanon said challengers must prove that a different approach delivers better economics. A leadership change alone cannot win their business. Their case must rest on better economics rather than the succession narrative.

The next test is whether AI-chip challengers can turn a larger opening into demonstrably better economics before leadership uncertainty slows AI spending and shrinks the prize.