Nvidia and CEO Jensen Huang have been sued by shareholders in a proposed class-action lawsuit alleging that they withheld information about a relationship involving a businesswoman suspected of links to Chinese intelligence.
The lawsuit claims that the alleged relationship exposed Nvidia to reputational, commercial and national-security risks, while the company's board has initiated an independent investigation.
The controversy has drawn congressional attention amid concerns about Megaspeed, potential diversion of advanced Nvidia chips to Chinese customers and China's access to American AI technology.
Nvidia and its chief executive, Jensen Huang, have been sued by shareholders in the United States over allegations that the company concealed information about his relationship with a businesswoman suspected of working for Chinese intelligence, raising questions about corporate disclosures and potential national-security risks.
The proposed class-action lawsuit was filed in a federal court in San Jose, California, on Monday, November 9. It alleges that Nvidia and Huang misled investors by failing to disclose the relationship and the potential risks it posed to the company's reputation and business prospects. The complaint also argues that the alleged links raised concerns about the security of sensitive American technology.
The lawsuit follows reports that Huang had an intimate relationship with Alice Huang, a former executive at Singapore-based technology company Megaspeed. US intelligence agencies reportedly identified her as an asset of China's Ministry of State Security, which is Beijing's principal intelligence agency. The allegations have not been established in court.
Huang acknowledged in a letter to Nvidia employees on Sunday that he had been unfaithful to his wife. He apologised to his family, colleagues and the company's board, but did not identify the woman involved. He also said he would cooperate fully with an independent investigation into the national-security concerns.
Shareholders Allege Nvidia Failed To Disclose Potential Risks
The complaint alleges that Nvidia and Huang withheld information that could have affected investors' assessment of the company's risks. Shareholders argue that the alleged relationship and its potential national-security implications exposed the company to reputational and commercial damage.
The lawsuit was filed shortly after Nvidia shares fell 4.3 per cent on Monday, wiping approximately $190 billion off the company's market capitalisation. The plaintiffs, led by shareholder Mark Kistenmacher, are seeking unspecified damages.
Nvidia did not immediately respond to Reuters' request for comment on the lawsuit. The company's board announced on November 8 that it was initiating an independent investigation, overseen by a committee of independent directors and supported by external legal advisers.
The board said it had no reason to believe that Nvidia's trade secrets or US national security had been compromised, but added that its inquiry would examine all available information. Huang has committed to cooperating with the review.
Alleged Chinese Intelligence Links Raise Questions Over AI Chip Security
The controversy has drawn attention to Megaspeed, which came under US scrutiny over concerns that advanced Nvidia chips could have been diverted to Chinese customers in violation of American export restrictions. The company and Nvidia have denied wrongdoing, while the allegations involving Alice Huang have raised separate questions about whether foreign intelligence could have gained access to sensitive corporate information.
US President Donald Trump said on Monday that the FBI was looking into the matter, although he expressed confidence that Huang would be fine. Trump also said Huang had told him he was unaware that the woman was allegedly a spy.
The case has attracted congressional attention, with senior Republican lawmakers seeking a closed-door briefing from Huang on the allegations and Nvidia's safeguards against foreign intelligence activity. The developments come amid growing scrutiny of China's access to advanced American semiconductor technology, which is central to the global artificial intelligence race.
