Nvidia shareholders have filed a class-action lawsuit in federal court in San Jose against the company and CEO Jensen Huang, alleging they withheld information investors should have known about Huang’s relationship with Alice Huang, a Chinese executive linked to Megaspeed, a Singapore-based data center firm that buys AI chips from Nvidia.
Jensen Huang, who was born in Taiwan, has faced scrutiny after reports described him as the target of a foreign intelligence effort tied to his relationship with Alice Huang. The two are not related. Nvidia initially denied any improper relationship before Jensen Huang acknowledged it on Sunday.
Nvidia has maintained that Megaspeed is simply an ordinary regional customer and that Huang’s meetings with Alice Huang amounted to routine business contact. “Jensen’s interactions with Ms. Huang are not unusual or unexpected. Meetings with customers are part of a C.E.O.’s job; Jensen talks with thousands of customer executives every year,” Nvidia spokesman John Rizzo told the New York Times.
Rizzo also said the company is “confident that if the U.S. government believes that any person is a threat to American industry, it would let us know,” and said customers like Megaspeed “receive ordinary business information — not sensitive Nvidia trade secrets — and zero information relevant to national security.”
The law firm of Schall, Brown & Schwartz first opened an investigation into Nvidia over the matter, and the Rosen Law Firm subsequently filed the class-action suit. The complaint alleges that Huang and Nvidia misled shareholders about national security concerns raised by the relationship, artificially inflating the company’s stock price.
“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the complaint states.
Nvidia’s board has launched its own independent investigation into Huang after the reports surfaced and the company’s share price dropped. China’s government has denied the spying allegation.
Separately, two law enforcement sources told CBS News on Monday that the Justice Department’s National Security Division is investigating Megaspeed over possible violations of U.S. export restrictions on advanced AI chips. The United States limits exports of its most advanced chips to China as the two countries compete for dominance in artificial intelligence technology.
Nvidia is one of the world’s most valuable companies and a global leader in manufacturing the chips that power AI systems. Huang has emerged as a prominent figure in the AI industry and serves as an informal adviser to President Trump, who has resisted calls to regulate AI out of concern that doing so could benefit China.
On Sunday, Huang sent a message to Nvidia employees acknowledging he had been “unfaithful” to his wife. “My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry,” he wrote.
