In brief

• Nvidia shareholders have filed a class action in San Jose federal court against the company and CEO Jensen Huang.
• The complaint alleges concealment of Huang's reported relationship with a former Megaspeed executive suspected of Chinese intelligence ties.
• Nvidia shares fell 4.3 percent on November 9, cutting roughly $190 billion from market value.

Shareholder complaint filed

Investors allege that Nvidia and Huang failed to disclose a reported romantic relationship with Alice Huang, a former head of Singapore-based Megaspeed, who shares his surname but is not related to him. According to the complaint, the company also kept quiet about national security concerns that the relationship allegedly raised, concerns the plaintiffs say could damage Nvidia's reputation and business prospects («У Китая повсюду свои щупальца». Шпионский скандал вокруг Nvidia поставил под угрозу превосходство США в сфере искусственного интеллекта — Politico – NV) (Инвесторы Nvidia подали коллективный иск против компании на фоне шпионского скандала – bes.media) (Акционеры подали в суд на Nvidia и Дженсена Хуанга из-за романа с предполагаемой китайской шпионкой – ulysmedia.kz).

The lawsuit was filed on November 9 in the federal court in San Jose, shortly after U.S. markets closed. Shareholder Mark Kistenmacher leads the group of plaintiffs, who are seeking damages without specifying an amount (Акционеры подали иск к Nvidia и Хуангу. Чем компании грозит риск «ключевого лица»? – oninvest.com) (Акционеры Nvidia подали в суд на компанию и ее руководителя Дженсена Хуанга из-за скандала с предполагаемой китайской шпионкой – Meduza).

Market reaction

The case follows reports that Nvidia's board had opened an investigation into Huang's conduct on November 9. The same day, Nvidia shares dropped 4.3 percent at the close of trading, and the company's market value fell by roughly $190 billion. Shares fell further intraday, reaching a low of $170.26 and dropping as much as 8.8 percent before recovering somewhat (Состояние главы Nvidia упало ниже $160 млрд после скандала – Charter 97).

Intelligence allegations and Huang's admission

U.S. intelligence reportedly believes Alice Huang may have worked for Beijing and that some chips bought by Megaspeed were illegally diverted to China (Акционеры Nvidia подали в суд на компанию и Хуанга из-за скандала с предполагаемой китайской шпионкой – The Bell). Jensen Huang, according to reports, acknowledged a personal relationship with her on November 8, after earlier denying it (Акционеры Nvidia подали в суд на компанию из-за романа ее гендиректора с предполагаемой китайской шпионкой – The Insider). The New York Times had first reported on the possible link in late October.

Impact on Huang's fortune

Huang's personal fortune also dropped sharply. Forbes data cited by Charter 97 show his net worth fell by $7.9 billion in one day to $154.7 billion, moving him from eighth to tenth place among the world's billionaires. Bloomberg data from September, also cited there, put his stake in Nvidia at about 3.4 percent, held directly and through family trusts.

Case status

The complaint is at an early stage, and no court has yet ruled on the allegations. Nvidia has not yet publicly responded to the lawsuit in the reports reviewed.

Read also

• Nvidia opens independent probe after reports tie CEO Jensen Huang to alleged Chinese spy
• Chinese Spy Allegations Involve Nvidia CEO Jensen Huang and Megaspeed Executive
• Nvidia Board Moves Toward Ousting CEO Jensen Huang Amid Chinese Spy Probe and Second Affair Report