Shareholders sue Nvidia and Jensen Huang over alleged affair with Alice Huang

Nvidia and its chief executive, Jensen Huang, have been sued by shareholders in federal court in San Jose, California, over the executive's alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him. The shareholders claim both parties did not disclose that the matter raised national security concerns and threatened Nvidia's reputation and business prospects.

The lawsuit and the investigation

The complaint was filed five minutes after the US stock market closed. Nvidia shareholders, led by Mark Kistenmacher, a retail investor, are seeking unspecified damages from the defendants. Nvidia announced on Sunday it was conducting an independent investigation into reports that Huang was the "target of a foreign intelligence effort". The New York Times reported on the alleged relationship last month, and said US authorities had concluded Alice Huang was a Chinese intelligence asset.

Market impact and statements

Shares in the company tumbled on Monday, closing down 4.3%, reducing Nvidia's market value by approximately $190bn. Nvidia's stock price fell, ultimately closing down 4.27%, at $178.67 per share, with market value shrinking by approximately $193 billion. Nvidia's board announced on the 8th that it will launch an independent investigation into allegations concerning CEO Jensen Huang's personal affiliations.

Jensen Huang told Nvidia's employees he had been unfaithful to his wife, without disclosing details of the alleged relationship. Huang said in an open letter posted on Nvidia's website: "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,"

Donald Trump said on Monday that the FBI is investigating Huang's affair but said he does not think the executive has a reason to worry. Trump said: "I know the FBI is looking into it in terms of something else, and I think that he'll be in good shape." Trump also said: "I did speak to him today just to see if he's feeling all right, how you're doing," and "He said he had absolutely no idea that the person in question was a spy."

Why it matters

The lawsuit adds legal pressure to an FBI investigation and an internal review at Nvidia, while the company's market value dropped by hundreds of billions of dollars amid the scandal.

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Sources

• theguardian.com: Nvidia and Jensen Huang sued by shareholders over affair with alleged Chinese spy | Nvidia | The Guardian
• ithome.com (in Chinese): Nvidia's Jensen Huang Faces Shareholder Class Action Lawsuit, Affair Scandal Causes Company Market Cap to Evaporate by Over 1 Trillion Yuan - IT Home

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.