SoftBank Group shares fell 5.2% in Tokyo on Friday as investors weighed what Jensen Huang's resignation as Nvidia's chief executive means for the companies most tied to the U.S. chip designer. The broader market held up: the Nikkei 225 rose 0.8% to 61,283.16, and chip equipment maker Tokyo Electron gained 1.5%, according to the Associated Press. Memory maker Kioxia Holdings dropped 2.5%.

The split matters for investors in Asia because Japan's exposure to Nvidia runs through very different businesses. Equipment makers such as Tokyo Electron sell to the foundries and memory makers that build AI chips for many customers, not only Nvidia. SoftBank, by contrast, has concentrated its balance sheet on the AI build-out itself, through Arm, OpenAI and a data center venture in which Nvidia has agreed to take shares.

Thursday's sell-off hit Nvidia suppliers

The first reaction came on Thursday, before Nvidia confirmed Huang's departure. The Nikkei 225 fell about 429 points, or 0.7%, to close near 60,819, ending a three-day winning streak, according to a market report by News On Japan citing CNBC. The broader Topix rose 0.2% to around 3,937, a sign that the selling was concentrated in technology names rather than spread across the market. The Growth Market 250 index of smaller companies fell more than 3%.

Reports about Huang set off selling in semiconductor shares, and investors also locked in gains after a rebound earlier in the week, the report said. Ibiden, which makes substrates for advanced processors, dropped around 10%. Its Nvidia-related sales were reported to exceed ¥120 billion, about 30% of its revenue. Advantest, whose testers check AI chips before they ship, suffered heavy losses, and SoftBank Group and Kioxia also declined, according to the report, which did not give figures for those three.

Other forces were also at work on Thursday: U.S. consumer inflation for October came in stronger than expected, and the dollar approached ¥160, its strongest against the yen in about two months, the report said. Atsushi Mimura, Japan's vice finance minister for international affairs, said recent currency moves looked excessively rapid. The dollar stood at ¥159.91 on Friday, the AP said.

Nvidia said on Nov. 12 that Huang had resigned as president, chief executive and director with immediate effect, and its shares fell more than 4% on Thursday in New York, the AP reported. Chief Financial Officer Colette Kress is serving as interim CEO while the board searches for a permanent successor. Huang's exit followed his acknowledgment of an affair with Alice Huang, a former executive at Singapore-based Megaspeed, The Next Web reported. A TBS report carried by News On Japan noted that allegations of espionage and leaks of product information have not been established as fact.

SoftBank's ties to Nvidia

SoftBank's newest results show how closely its holdings are bound to the chipmaker. In its report for the six months to September, released this week, SoftBank said Arm's revenue growth in data center chips came partly from wider use of Arm-based server processors, including Nvidia's Grace and Vera. Arm and Nvidia also announced a PC superchip, the RTX Spark, in June.

The group's Energy Global unit, which has data center lease arrangements with OpenAI, received $1.5 billion (¥240.18 billion) in advance payments in the half under a share issuance agreement with Nvidia, the report showed. SoftBank also completed a third $10 billion tranche of its follow-on investment in OpenAI in October, bringing its cumulative investment to $64.6 billion for a stake of about 13%.

That leaves SoftBank exposed on several fronts at once: to any slowdown in Nvidia's spending plans, to the value of OpenAI, and to the cost of building the data centers that run Nvidia chips. SoftBank had already reported a ¥1.12 trillion net loss for the July-September quarter, driven by a charge on power equipment for U.S. AI data centers and higher funding costs.

What Tokyo is watching

Japanese commentary so far has focused more on policy than on earnings. Tetsuo Kotani, a professor of American politics and international security, told TBS the affair could weaken Washington's hand in negotiations with Beijing. The same TBS report listed pressure on chip and AI stocks, rare earth supply risks for automakers and electronics makers, and a possible stronger yen if U.S. technology investment flows reverse as possible effects for Japan.

Elsewhere in Asia on Friday, South Korea's Kospi slipped 0.5% and SK Hynix fell 2%, while Taiwan's Taiex rose 1.7%, the AP reported.

The next test for Tokyo's AI stocks is Nvidia's quarterly report on Nov. 17, Kress's first as interim chief. For Ibiden, Advantest and SoftBank, the number that matters most is any change in Nvidia's outlook for data center orders.