Nvidia, CEO Jensen Huang sued by shareholder over alleged investor deception

Nvidia and its chief executive Jensen Huang have been sued by a shareholder who accused them of misleading investors over media reports about Huang's alleged affair with a woman suspected of being a Chinese spy.

The complaint, filed on Monday in a California court, alleges that Nvidia and Huang failed to disclose the relationship and issued false statements about the company's ties to Alice Huang, whose reported links to Chinese intelligence have raised national security concerns.

The lawsuit claims that the alleged omissions posed a material risk to Nvidia's reputation and business prospects. It seeks unspecified damages and a jury trial.

The case comes after US President Donald Trump said the Federal Bureau of Investigation (FBI) was investigating the matter. Trump said on Monday that Huang had told him he was unaware that the woman could be involved in espionage. Huang has acknowledged the affair and apologised, according to the report.

Nvidia's board is also scrutinising the matter. The allegations have raised concerns that Beijing could be seeking access to the company's advanced artificial intelligence chips, which are subject to US export restrictions to China.

The complaint was filed by retail investor Mark Kistenmacher, who is seeking to represent shareholders who bought Nvidia stock between 9 October, when the New York Times first reported the affair, and 8 November, when the company said it was investigating reports that Huang had been the "target of a foreign intelligence effort".

Nvidia did not immediately respond to a request for comment.

The company's shares fell $7.97, or 4.3 per cent, on Monday, wiping out around $190 billion in market value. The stock declined again on Tuesday before the opening bell.

The lawsuit alleges that investors suffered losses because of the defendants' "wrongful acts and omissions" and the resulting fall in the company's market value. It argues that investors would not have bought the shares at artificially inflated prices had they known the alleged facts.

The New York Times reported that US intelligence had determined that Alice Huang, a former executive of Singapore-based Megaspeed International, was gathering information for Beijing. The company reportedly bought more than $4.8 billion worth of Nvidia chips over the past two years.

Alice Huang and Jensen Huang are not related. Huang is a common Chinese surname.