Shareholders have filed a federal lawsuit against Nvidia and its chief executive, Jensen Huang, accusing the company and its leader of defrauding investors. The legal action centers on Huang’s alleged undisclosed relationship with Alice Huang, a former executive at Singapore-based Megaspeed who US authorities have identified as a Chinese intelligence asset.
The complaint, filed in federal court in San Jose, California, claims that both Nvidia and Jensen Huang failed to disclose material information to shareholders. The lawsuit alleges that the executive’s affair raised national security concerns that threatened the company’s reputation and business prospects. The filing occurred just five minutes after the US stock market closed on Monday.
Nvidia stock drop and market reaction
The legal challenge comes amid significant volatility for the world’s most valuable chipmaker. Nvidia announced on Sunday that it was launching an independent investigation into reports that Jensen Huang was the target of a foreign intelligence effort. Following the announcement, shares in the company tumbled 4.3% on Monday, wiping approximately $190bn from the company’s market value.
Mark Kistenmacher, a retail investor, is leading the shareholder suit. The plaintiffs are seeking unspecified damages from the defendants. It is common for shareholders to pursue legal action following unexpected declines in share price, particularly when those drops are linked to sudden revelations about corporate governance or security risks.
FBI investigation and Trump comments
President Donald Trump confirmed on Monday that the Federal Bureau of Investigation is looking into the matter. Speaking at a White House briefing, Trump stated that the FBI is investigating Huang’s affair but expressed confidence in the CEO’s standing.
“I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape,” Trump said. He added that he had spoken with Jensen Huang earlier in the day to check on his well-being. According to the President, Huang told him he had absolutely no idea that the person in question was a spy.
The New York Times first reported on the alleged relationship last month. The report stated that US authorities had concluded Alice Huang was an asset of Chinese intelligence. The revelation has cast a shadow over Nvidia, which Jensen Huang co-founded in 1993 and has led through its rise to prominence in the artificial intelligence boom.
Jensen Huang previously told Nvidia employees that he had been unfaithful to his wife, though he did not disclose the specific details of the alleged relationship at that time. Nvidia did not immediately respond to a request for comment from Reuters regarding the new lawsuit.
In an open letter posted on the company website, Jensen Huang addressed the controversy directly. He stated that he supports the investigation and will cooperate fully. He emphasized his commitment to protecting Nvidia and supporting America’s national security.
Source: The Guardian
