Nvidia and its Chief Executive, Jensen Huang, were sued in a proposed class action accusing them of misleading shareholders by concealing Huang's alleged relationship with a suspected Chinese intelligence asset.
According to a complaint filed in a federal court in San Jose, California, the defendants misled investors about Huang's alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him. The lawsuit claims they failed to disclose that the matter had raised national security concerns that could threaten Nvidia's reputation and business prospects.
The New York Times reported last month on the alleged relationship and said US authorities had concluded that Alice Huang was an asset of Chinese intelligence.
Nvidia did not immediately respond to a request for comment.
Jensen Huang told Nvidia employees that he had been unfaithful to his wife, but did not disclose details of the alleged relationship.
Huang co-founded Nvidia and has led the Santa Clara, California-based company as it became the world's most valuable chipmaker, making him one of the most prominent figures in the global artificial intelligence boom.
Nvidia announced on Sunday that it had launched an investigation into the matter. Its shares fell 4.3% on Monday, wiping approximately $190 billion off the company's market capitalisation. The lawsuit was filed five minutes after the US stock market closed.
Shareholders commonly file lawsuits against companies following unexpected declines in share prices. The Nvidia shareholders bringing the action, led by Mark Kistenmacher, are seeking unspecified damages from the defendants.
For enquiries or further information, contact ask@tlr.ae or call +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels.