Nvidia and chief executive Jensen Huang have been hit with a shareholder class-action lawsuit alleging they concealed his relationship with a suspected Chinese spy, after the chipmaker shed around $190bn (£145bn) in market value on Monday.
The proposed lawsuit, filed in a federal court in San Jose, California, accuses the AI giant and its founder of misleading investors by failing to disclose potential national security risks linked to Huang’s affair.
Shares in Nvidia closed 4.3 per cent lower at $178.67 on Monday, having plunged almost nine per cent earlier in the session, as the scandal continued to weigh on the world’s most valuable chipmaker.
The complaint, brought by shareholder Mark Kistenmacher and represented by the Rosen Law Firm, alleges that Nvidia violated US securities laws by withholding information that could damage its reputation and business prospects.
It covers investors who acquired Nvidia shares between 9 October 2025 and 8 November 2026 and seeks unspecified damages.
The plaintiffs claim that Nvidia’s previous statements about its dealings with Singapore-based data centre company Megaspeed were misleading because they failed to disclose Huang’s relationship with former executive Alice Huang.
US intelligence officials reportedly identified Alice Huang as a Chinese intelligence asset, although China has rejected the espionage allegations.
Nvidia faces mounting legal scrutiny
The lawsuit follows Huang’s admission on Sunday that he had been unfaithful to his wife, after previously describing his dealings with Alice Huang as professional.
“My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry”, he told employees.
Nvidia’s board launched an independent investigation into whether its boss had been targeted by a foreign intelligence operation.
The chipmaker said it “had no reason to believe” confidential information or national security had been compromised, and the board reiterated its confidence in Huang.
The legal action also comes as Donald Trump confirmed on Monday that the FBI was investigating the scandal.
“I know the FBI is looking into it”, the US president told reporters, although he defended Huang, saying he believed the executive had no knowledge of the woman’s alleged spy connections.
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