Nvidia CEO Jensen Huang is facing a shareholder lawsuit alleging that he and the company misled investors about his reported relationship with former Megaspeed executive Alice Huang. (Foto: Instagram)
Nvidia and CEO Jensen Huang are facing a shareholder lawsuit alleging fraud over the company’s handling of Huang’s reported relationship with Alice Huang, a former executive at Singapore-based Megaspeed who is not related to him. The complaint, filed in federal court in San Jose, California, says Nvidia and Huang misled investors about the alleged relationship and the security concerns it raised. Nvidia is valued at $4.3 trillion, equivalent to about 23.65 trillion Brazilian reais.
The lawsuit came as President Donald Trump said the FBI was investigating Huang’s relationship with Alice Huang. She has publicly acknowledged having an extramarital relationship with the CEO. Shareholders allege that Nvidia and Huang failed to disclose that the situation could raise national security concerns and threaten the company’s reputation and business prospects.
Nvidia announced Sunday, Nov. 8, that it had begun an independent investigation into reports that Huang may have been “the target of a foreign intelligence operation.” China denied the allegation that Alice Huang was used as a spy. Nvidia’s review and the claims surrounding the alleged relationship remain distinct from the shareholder complaint, which accuses the company and its CEO of misleading investors.
Nvidia shares fell as much as 8.8% amid the controversy, erasing nearly $400 billion in market value, or about 2.2 trillion Brazilian reais. Huang’s personal fortune also declined by $7.4 billion, approximately 40 billion Brazilian reais, and he fell from eighth to 10th place in Forbes’ ranking of billionaires. Huang told Nvidia employees he had been unfaithful to his wife but did not provide details about the alleged relationship.
On Monday, Nov. 9, Nvidia shares closed down 4.3%, cutting the company’s market value by approximately $190 billion that day. The lawsuit was filed five minutes after the U.S. stock market closed. Shareholder lawsuits after unexpected stock declines are common, and the plaintiffs are seeking damages from the defendants, though the amount has not been specified.
The shareholders are led by individual investor Mark Kistenmacher. Huang co-founded Nvidia in 1993, and under his leadership the California-based company became the world’s most valuable chipmaker. The company’s rise has also made Huang one of the most prominent figures in the global artificial intelligence industry.
