Nvidia and its chief executive, Jensen Huang, are facing a class-action lawsuit in a California federal court. The legal challenge alleges the company misled investors regarding potential national security risks linked to an affair involving Huang and Alice Huang, a former executive at the Singapore-based firm Megaspeed. Although they share a surname, the two are not related.
This development follows reports that US authorities identified Alice Huang as a Chinese intelligence asset. Plaintiffs claim that Nvidia suppressed the implications of this relationship, which threatened the company’s reputation and financial stability. The lawsuit further asserts that statements made by the company concerning its ties to Megaspeed were misleading, particularly amid ongoing scrutiny over whether the firm diverted Nvidia chips to China in violation of US export controls.
In response to the mounting pressure, Nvidia announced on Sunday that it is launching an independent investigation into allegations that its CEO was targeted by a foreign intelligence operation. Investors reacted negatively to the news, causing the company’s share price to drop by 4.3% on Monday, effectively wiping roughly $190 billion from its market value. Closing down 4.3%, reducing Nvidia’s market value by approximately $190bn, shares in the company fell on Monday.
The legal filing, initiated by retail investor Mark Kistenmacher, was lodged shortly after the US stock market closed. This class-action lawsuit is part of a broader wave of legal scrutiny, as several law firms have launched investigations into whether the tech giant failed in its disclosure duties to shareholders. Neither Nvidia nor Megaspeed provided an immediate response to requests for comment regarding the litigation. Led by Mark Kistenmacher, a retail investor, are seeking unspecified damages from the defendants in the class action suit, the term for a legal action where a person or small group of people sues an entity on behalf of a larger group, it is common for shareholders to sue companies after unexpected share price declines. Nvidia shareholders.
President Donald Trump addressed the situation during a White House briefing on Monday, confirming that the FBI is investigating the matter.
However, Trump downplayed concerns about the CEO’s personal involvement. “I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape,” the president stated, noting that he had spoken to Huang directly. According to huang, In an interview He added: “And I think the US government also has as well.”.
According to Trump, the CEO claimed to have had “absolutely no idea that the person in question was a spy.”
Jensen Huang, who co-founded Nvidia in 1993, addressed the situation in an open letter posted to the company’s website. He admitted to being “unfaithful” to his wife but did not name the individual involved. “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,” he wrote. Huang co-founded Nvidia in 1993 and has led the California company as it became the world’s most valuable chipmaker and made him one of the world’s most prominent symbols of the artificial intelligence boom. The AI doomsday threat: Distinguishing facts from fear. Join Dan Milmo, Prof Dame Wendy Hall and Stuart J Russel as they discuss the warnings surrounding artificial intelligence and how we can separate fact from speculation, on Monday 30 November. Book tickets here or at guardian.live.
Previously, when the allegations first emerged, Nvidia characterized Huang’s interaction with Alice as “not unusual or unexpected,” telling reporters that meetings with customers were a standard part of a CEO’s professional responsibilities. For its part, Megaspeed stated last year that its operations have consistently remained in full compliance with all applicable laws, including US export control regulations.
