If California voters approve Proposition 40 this November, NVIDIA CEO Jensen Huang could face one of the largest individual tax bills in California history. According to the state’s voter guide, this measure would impose a one-time wealth tax on eligible billionaires.
The proposal targets registered millionaires by 2026.
The proposal mandates a 5% tax on wealth exceeding the threshold, applicable to taxpayers who remain residents of California as of January 1, 2026. The tax is due in 2027, and taxpayers may elect to pay it in installments over five years, subject to additional costs.
NVIDIA's rise amplifies tax liability
The primary source of Huang’s potential tax liability is the significant appreciation of NVIDIA in recent years. The report notes that NVIDIA’s market capitalization has risen to approximately $5.6 trillion, an increase of about $1.3 trillion over the past year. Since his personal wealth primarily stems from his NVIDIA shares, this tax liability corresponds largely to unrealized paper gains rather than cash income.
The debate centers on unrealized wealth.
Opponents argue that taxing corporate equity and unsold shares could prompt wealthy residents or entrepreneurs to leave California, thereby reducing future state income tax revenues. The California Legislative Analyst’s Office estimates that this proposal could lead to a sustained annual reduction in income tax revenue from billionaires of less than $1 billion.
Unlike some tech executives who have publicly opposed the proposal, Jensen Huang has repeatedly stated that high taxes would not prompt him to leave California. Earlier this year, he said he was willing to pay the state’s higher taxes and encouraged others to remain in the state.
This statement has drawn attention and is related to NVIDIA’s position in the AI investment boom. As the market continues to increase investment in AI infrastructure, NVIDIA remains one of the primary beneficiaries, with its business expansion extending beyond chips to a broader AI ecosystem.