When Nvidia Sneezed, Who In India Caught Cold?

Nvidia makes the chips that power most of the world's artificial intelligence. Many young Indians now check its share price before the Sensex. On Vested Finance, an app Indians use to buy US shares, it made up about 70 per cent of trades over ten sessions.

On the night of November 12, those phones carried bad news. Jensen Huang, its boss for 33 years, had resigned over a scandal in his private life that also alarmed Washington. The shares fell as much as 14 per cent within hours.

The next morning, Dalal Street barely flinched. The Sensex, which tracks 30 of India's biggest companies, slipped just 0.39 per cent, and its cousin the Nifty 0.61 per cent.

So did India escape? Not quite.

As the district collector of Garhwa, one of Jharkhand's driest districts, I learnt not to trust averages. The rainfall report on my desk could look normal while one block was parched and the next waterlogged. This month, the Sensex is that report. To see where the shock really landed, we have to go block by block.

Why the Sensex stayed calm

Oddly, the AI storm first helped India. Big foreign funds rushing out of AI shares in early November needed a safer home, and India, with few AI companies, looked like one. After months of selling, they bought Indian shares worth ₹38,971 crore in that first week.

Oil helped too. Brent crude fell about 13 per cent that week, good news for a country that imports nearly 85 per cent of its fuel, and the rupee strengthened from 95.40 to about 94.15. By November 9, the Sensex and Nifty were at their highest since February 27. Small savers held steady too, putting a record ₹32,490 crore into mutual funds through about ten crore monthly SIPs in September.

So why did the market dip on November 13? Mostly not because of Nvidia. Data out a day earlier showed retail inflation, the rise in everyday prices, crossing the RBI's 6 per cent upper limit in October. The RBI had already raised its interest rate to 5.50 per cent that month, its first rise in nearly four years. For Indian markets, oil and onions still matter more than chips.

Small AI shares took the first hit

The real damage fell on smaller companies seen as India's own Nvidia stories. E2E Networks rents out AI computing power by the hour, a bit like a cyber cafe for companies. Its shares, near ₹710 in mid-October, soon hit the lower circuit, the most a share may fall in a day, seven days running. Netweb Technologies, which builds AI servers on Nvidia chips, lost more than 15 per cent in seven straight falls to November 6, despite a quarterly profit of ₹136.7 crore. Good results could not beat a bad mood.

Then it reached the dinner table

The most personal losses belong to Nvidia's Indian staff. Like many tech workers, they are paid partly in company shares, handed over in instalments. In March, its 5,590 Indian employees had about 7.05 million such shares still to come, worth about $1.73 billion in early October and about $1.11 billion by the evening of November 11. That is a drop of about $620 million, or ₹5,800 crore, even before the next day's fall.

As Divisional Commissioner of Ranchi, I met parents whose proudest possession was a child's offer letter from Bengaluru or Hyderabad. A share that falls in California is now felt at dinner tables in Ranchi, most of all by families who planned a flat or college fees around it.

Many Indians bought the fall

Indians who own Nvidia directly did not panic. Many bought more. On Vested, buying beat selling in eight of the last ten sessions, and about 80 per cent of trades on November 10 and 11 were purchases.

Mutual fund investors had it easier. Nvidia fell 13 per cent in the week to November 11, yet most Indian funds investing in US shares lost only 1 to 3.2 per cent, says Value Research. The 13 Indian schemes holding Nvidia keep just 0.63 to 12.12 per cent of their money in it. Not keeping all your eggs in one basket worked again. The bigger risk sits with those who put most of their overseas savings into one share, now run by a temporary boss.

India's AI plans wait for a delivery

For India's AI builders, the worry is simpler: will the chips arrive on time? Yotta is spending more than $2 billion on 20,736 top-end Nvidia chips, with full installation planned by end-November. L&T is building a 10,000-chip Nvidia facility in Chennai, and Reliance plans to start the first 120 MW of its Jamnagar AI centre on Nvidia chips by end-2026.

In Pakur, a district that lives by its black stone, I saw the crushers fall silent within weeks when outside orders slowed. Truckers and dhabas felt it long before any report did. India's AI plans lean just as heavily on one supplier.

The chips have not changed. The worry is who leads Nvidia next, and whether its customer ties hold. India's own chip plants, which mostly assemble and test chips, cannot fill the gap soon. One safeguard exists: the IndiaAI Mission's shared computing pool, though mostly Nvidia, also uses AMD, Intel and AWS chips. On the day Nvidia fell, rivals AMD and Broadcom each rose over 5 per cent. Money was moving within AI, not fleeing it.

Indian IT giants are stuck in the middle. In February, their shares fell 6.3 per cent in a day on fears that AI would take their work. Now an AI wobble brings no relief, because their clients' budgets ride on the same boom.

What to watch next

Three dates matter. On November 17, Nvidia reports its first results since Huang left. In December, its Indian staff get their next instalment of shares and will see what those are really worth. And the RBI's December meeting, where ICRA expects another rate rise, may matter more to the Nifty than both.

For now, Nvidia's crisis has reached India as a tremor, not an earthquake, travelling through people and projects rather than the index. In Garhwa, a normal average never told me every block was safe. I had to go and see. The Sensex looks fine this week. Go block by block, and many Indians holding a piece of the AI dream are not so sure.

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