Jensen Huang,Chief Executive,Nvidia
According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang’s alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him, and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects.
Washington: Nvidia and Chief Executive Jensen Huang were sued on Monday in a proposed class action accusing them of defrauding shareholders by concealing Huang’s ties with a suspected Chinese spy.
According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang’s alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him, and did not disclose that the matter raised national security concerns that threatened Nvidia’s reputation and business prospects.
The New York Times reported last month about the alleged relationship, and that US authorities had concluded Alice Huang was a Chinese intelligence asset.
Nvidia did not immediately respond to a request for comment.
United States President Donald Trump has said the FBI is probing Nvidia CEO Jensen Huang’s relationship with a woman accused of working for Chinese intelligence services.
Speaking at the White House on Monday, Trump said law enforcement had begun inquiries following Huang’s admission that he engaged in an extramarital relationship with a Chinese executive named Alice Huang.
“We’ll look into it. I know the FBI is looking into it in terms of something else,” Trump told reporters at a news conference. “I think he will be in good shape.”
Trump said Huang told him earlier that he had “absolutely no idea” that the woman was an alleged intelligence agent.
“He said, ‘I had no idea that she was a spy,’ and I really believe him,” Trump said.
The proposed class-action lawsuit, filed by shareholders led by Mark Kistenmacher, alleges that Nvidia and Huang failed to disclose the relationship and the national security concerns surrounding it. The shareholders are seeking unspecified damages, Reuters reported.
Huang had earlier addressed the personal matter in a communication to employees, acknowledging his infidelity. “I was unfaithful to my wife,” he said.
The controversy has also drawn attention from US lawmakers over the distribution of advanced artificial intelligence chips and the possibility of restricted technology reaching China through third countries.
Democratic members of the House Foreign Affairs Committee have sought answers from Commerce Secretary Howard Lutnick on the administration’s export policies, while Republican lawmakers have also sought a closed-door discussion with Huang.
Nvidia shares closed 4.3 per cent lower on Monday, wiping out approximately USD 190 billion from the company’s market capitalisation, Reuters reported. The lawsuit was filed five minutes after the US stock market closed.
The legal proceedings and ongoing board investigation could keep attention on Nvidia’s disclosure practices and the scrutiny surrounding its technology exports as the company faces questions over the alleged relationship and its potential implications.
Jensen Huang told Nvidia’s employees, he had been unfaithful to his wife, without disclosing details of the alleged relationship.
He co-founded Nvidia, and has led the Santa Clara, California-based company as it became the world’s most valuable chipmaker and made him one of the world’s most prominent symbols of the artificial intelligence boom.
Nvidia announced a probe into the matter on Sunday. Its shares closed down 4.3% on Monday, reducing Nvidia’s market capitalization by approximately $190 billion. The lawsuit was filed five minutes after the US stock market closed.
It is common for shareholders to sue companies after unexpected share price declines.