NVIDIA Hopper is a data-centre GPU architecture designed to accelerate generative AI training, large language model (LLM) inference, and high-performance computing (HPC).(Image credit: Getty Images)

Nvidia chaos and why the AI industry is suddenly on the back foot

by · Creative Bloq
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Until recently, the AI industry seemed unstoppable. Every week saw more powerful models, extra billions in funding, and a further spread of data centres. Anyone who complained was told: "Don't even bother. This is happening, whether you like it or not."

This month, though, things felt different. US voters delivered a blunt verdict on AI infrastructure in ballot measures, while Nvidia, the chipmaker who's played a vital role in building that infrastructure (and made RAM more expensive in the process), found itself at the centre of a spy scandal. The recent Nvidia scandal and resignation of Jensen Huang have sent things into a spiral, from a share price drop to speculation that the AI bubble has burst, even a rebranding, when we asked whether Nvidia need a new logo as well as a new CEO?

Neither story on its own spells disaster for AI. But together, they suggest something important has shifted. And that matters for the millions of creatives whose lives are being reshaped by this tech.

(Image credit: NVIDIA)

Voters bite back at AI data centres

Most news coverage of the US midterms focused on who controls Congress. But at the same time, 40 of 41 local data centre measures decided on 3 November across 10 states favoured limiting development.

Voters approved 27 restrictive measures and rejected all 13 that would have helped projects go ahead. The results range from moratoriums and zoning limits to outright bans. And candidates who campaigned on pausing data centre construction won governor's races in Texas, Ohio and Georgia. This was not surprising, because in NBC News' exit poll, 76% of voters said they'd oppose a new data centre in their own community.

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Nvidia’s spy scandal and Jensen Huang’s resignation

It's important to understand that this is not a partisan issue. Democrats, Republicans and Independents alike have been fighting back against the AI industry. So the timing couldn't have been worse for Nvidia.

On 6 November, The New York Times shared details of how CEO Jensen Huang had been the target of an alleged espionage operation involving a Chinese businesswoman US officials believe was working for China's Ministry of State Security. On Sunday, Huang admitted to an extramarital affair with her and apologised to staff.

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Huang said he had no idea she was a spy, and Beijing has dismissed the claims as groundless. Nvidia's board launched an inquiry and said it still had confidence in him. But later revelations of a second affair piled on the pressure, and Huang eventually resigned on 12 November.

Maybe I'm overreacting, but this feels like a watershed moment. Up until now, the AI industry has relied on two things: the assumption that its physical expansion was inevitable, and the aura of its leaders as visionaries above scrutiny. Now, that's changed.

Jensen Huang(Image credit: NVIDIA)

What it means for creatives

That doesn't mean the AI boom is about to collapse, of course. But it does suggest the era of 'build first, ask questions later' is ending. Expect more political resistance, more regulation and more scrutiny.

For creatives, that may be a double-edged sword. On the one hand, if you're using AI tools, they're likely to go up in price. On the other hand, if you're worried about AI's impact on jobs and don't want it to scrape your work, there's a chance things will slow down now, at least a little.

Finally, it feels like a good time to remember that we actually have a voice. For years now, many of us have either kept quiet or felt like we've been shouting into the void about AI. Now that millions of voters are shouting too, the industry might actually start to pay attention.