WASHINGTON : The complaint, filed on Monday in a federal court in San Jose, California, alleges that Nvidia and Huang failed to disclose the relationship and the potential national security concerns associated with it, which shareholders claim could have damaged the company’s reputation and business prospects.
According to a Reuters report, the lawsuit centres on Huang’s alleged relationship with Alice Huang, a former executive at Singapore-based data centre firm Megaspeed. The New York Times reported last month that US authorities had concluded she was an asset of Chinese intelligence.
Nvidia’s board announced an investigation into the matter on Sunday, with independent directors appointing external legal counsel to examine the circumstances surrounding the alleged relationship. The company has maintained that there is no evidence that national security or proprietary corporate information was compromised.
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The proposed class-action lawsuit, led by shareholder Mark Kistenmacher, seeks unspecified damages. Huang had earlier addressed the personal matter in a communication to employees, acknowledging his infidelity and stating, “I was unfaithful to my wife.”
The controversy has also attracted attention from US lawmakers amid wider concerns over the distribution of advanced artificial intelligence chips and the possibility of restricted technology reaching China through third countries.
Democratic members of the House Foreign Affairs Committee have sought explanations from Commerce Secretary Howard Lutnick regarding the administration’s export policies. Republican lawmakers have also requested a closed-door discussion with Huang.
Adding to the pressure, Nvidia shares fell 4.3 per cent on Monday, wiping approximately $190 billion off the company’s market capitalisation, Reuters reported. The lawsuit was filed just five minutes after the US stock market closed.
The legal action, alongside the ongoing board investigation and scrutiny of US semiconductor export controls, could intensify questions over Nvidia’s disclosure practices, corporate governance and exposure to national security concerns as it continues to play a central role in the global AI industry.
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