Nvidia and its chief executive, Jensen Huang, are facing a lawsuit from shareholders who accuse the leadership of defrauding investors. The legal action centers on a scandal involving an alleged Chinese intelligence asset, identified as Alice Huang, and claims that the company failed to disclose that the relationship posed national security concerns and threatened the business prospects and reputation of the $4.3tn chipmaker.
The lawsuit was filed five minutes after the US stock market closed on Monday, following a difficult day for the company’s stock, which tumbled 4.3% and wiped approximately $190bn off Nvidia's market value. The legal filing comes amid public statements from Donald Trump, who confirmed that the FBI is investigating the CEO’s links to the alleged spy. Trump noted that while the bureau is looking into the matter, he does not believe the executive has reason to be overly concerned, stating, “I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape.”
Jensen Huang, who co-founded Nvidia in 1993 and has become a central figure in the global artificial intelligence boom, recently addressed the situation in an open letter posted to the company's website. He stated, “I support the investigation and will cooperate fully. I love our country and our company. I am committed to protecting Nvidia and supporting America’s national security.” Separately, Huang informed Nvidia employees that he had been unfaithful to his wife, though he did not provide specific details regarding the nature of the relationship. He also reportedly told Trump that he had “absolutely no idea that the person in question was a spy.”
Nvidia announced on Sunday that it had initiated an independent investigation into reports that Huang was the target of a foreign intelligence effort. The company did not immediately respond to requests for comment regarding the lawsuit. The alleged relationship was first reported by the New York Times last month, which stated that US authorities had concluded Alice Huang was a Chinese intelligence asset.
