Key Points
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Nvidia rocked Wall Street on Monday, Nov. 9, with co-founder and CEO Jensen Huang admitting to an affair with an alleged Chinese spy.
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Though Huang’s story is garnering headlines, it takes a back seat to a pair of problems that cut to the core of the AI data center build-out.
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Election Night and the bond market have both sent unmistakable warnings to Wall Street and investors about AI stocks.
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Earlier this week, the backbone of the artificial intelligence (AI) revolution, Nvidia (NASDAQ:NVDA), rocked Wall Street. According to CNBC, the company’s co-founder and CEO, Jensen Huang, admitted to an affair with an alleged Chinese spy. Then, on Nov. 11, The New York Times reported that Huang had a second affair with an employee who reported to him.
Not only is Huang synonymous with Nvidia’s success, but he’s arguably the figurehead of the AI data center build-out. Nvidia’s graphics processing units are what make data centers tick, and the company’s seemingly countless deals have fueled the AI infrastructure build-out. An investigation launched by Nvidia’s board has clearly unnerved investors, and there’s now, as of 7:30 p.m. ET on Nov. 11, talk of the board ousting Huang as CEO.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
While Jensen Huang’s affair is certainly headline-worthy and pertinent to Nvidia’s shareholders, there are far bigger issues with the AI trade than the goings-on in Huang’s personal life.
Image source: Getty Images.
Election Night put the AI infrastructure build-out on shaky ground
For example, Election Night threw AI stocks for a loop.
On the one hand, prediction markets correctly forecast a Democratic blue wave in Congress weeks in advance. However, the gubernatorial blue wave was unexpected, with at least five Democratic candidates flipping governorships previously held by Republicans. Two states remain uncalled by the Associated Press, as of Nov. 9.
The concern is where Democratic governors won: Texas, Ohio, and Georgia. These three states are near the top of the list in terms of future data center capacity. Texas Gov.-elect Gina Hinojosa has pledged to ban new data center approvals until her state’s legislature passes laws governing electricity and water rights, among other factors.
The stock market entered 2026 at its second-highest valuation over the last 156 years. The AI infrastructure build-out is the only reason investors have tolerated such an aggressive premium. If this build-out slows, even marginally, at the state level, it could have significant ripple effects throughout the AI trade.
Image source: Getty Images.
The bond market is sending an unmistakable warning to investors about AI stocks
Furthermore, the bond market is sending Wall Street and investors a message that can no longer be swept under the rug.
While some companies are using cash on hand or issuing stock to fund their data center expansion or large language model development, many are relying on debt. When public companies issue debt, it’s typically priced around a par value of $1,000, which financial websites express as $1. When bond traders are confident that a company will meet its debt obligations, bond prices often hover around $1.
Throughout much of 2026, we’ve witnessed an absolute rout in bond prices for AI companies. The 2056 notes issued by Elon Musk’s Space Exploration Technologies (NASDAQ:SPCX) (better known as SpaceX) in June have fallen precipitously to $0.83. Meanwhile, Nvidia’s 2060 notes are trading at just $0.63.
These discounts imply serious concern about the sustainability of capital expenditures tied to the AI build-out.
Don’t forget that every game-changing tech innovation since (and including) the advent and proliferation of the internet has navigated an eventual bubble-bursting event early in its expansion. It’s unlikely that AI will be the exception to this unwritten rule, and bond traders know it.
While Jensen Huang’s admission of an affair is front-page news, it doesn’t hold a candle to the structural issues facing the stock market’s No. 1 catalyst.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Space Exploration Technologies. The Motley Fool has a disclosure policy.
