Nvidia Shareholders Sue Jensen Huang Over Alleged Ties to Suspected Chinese Spy

Nvidia and CEO Jensen Huang are facing a shareholder lawsuit alleging fraud over Huang’s reported relationship with Alice Huang, a former executive at Singapore-based Megaspeed who is suspected of being a Chinese spy. The complaint, filed in federal court in San Jose, California, says Nvidia and Huang misled investors about the alleged relationship. Nvidia, one of the world’s largest chipmakers, is valued at $4.3 trillion.

The shareholders say the company and its CEO failed to disclose that the situation raised national security concerns and could threaten Nvidia’s reputation and business prospects. The lawsuit came as President Donald Trump said the FBI was investigating Huang’s relationship with Alice Huang, who is not related to the CEO and has publicly acknowledged having an extramarital affair with him.

Nvidia said Sunday, Nov. 8, that it was conducting an independent investigation into reports that Huang had been “the target of a foreign intelligence operation.” China denied the allegation that it used Alice Huang as a spy. Huang has told Nvidia employees that he was unfaithful to his wife, but did not provide details about the alleged relationship.

The controversy has coincided with a steep decline in Nvidia shares. The stock fell as much as 8.8%, wiping out nearly $400 billion in market value, while Huang’s net worth dropped by $7.4 billion. He also fell from eighth to 10th place on Forbes’ billionaire ranking.

On Monday, Nov. 9, Nvidia shares closed down 4.3%, cutting the company’s market value by about $190 billion that day. The lawsuit was filed five minutes after the U.S. stock market closed. Led by individual investor Mark Kistenmacher, the shareholders are seeking damages from the defendants, but have not specified an amount. Nvidia co-founder Huang established the company in 1993; under his leadership, it became the world’s most valuable chipmaker and made him a leading figure in artificial intelligence.