Shareholders sue Nvidia and CEO Jensen Huang over alleged Chinese spy affair

Shareholders have sued Nvidia and its chief executive, Jensen Huang, accusing them of misleading investors about a case involving an alleged Chinese spy. The complaint was filed in federal court in California, and Nvidia's share price fell sharply after the case became public. The company's shares closed down 4.3% on Monday, reducing its market value by about $190bn, according to The Guardian.

The lawsuit is a class action, a case brought on behalf of a group of shareholders. It is led by Mark Kistenmacher, a retail investor, and seeks unspecified damages. The complaint was filed five minutes after the U.S. stock market closed. Shareholders claim that Nvidia and Huang did not disclose that the matter raised national security concerns that could threaten the chipmaker's reputation and business prospects.

The case centres on Alice Huang, a former executive of Singapore-based Megaspeed. She is not related to Jensen Huang. Megaspeed has reportedly been investigated over suspicions that it may have diverted Nvidia chips to China in breach of U.S. export restrictions, which are rules limiting the sale and shipment of certain technology abroad.

The New York Times reported last month that U.S. authorities had concluded Alice Huang was a Chinese intelligence asset, meaning someone working for Chinese intelligence services. President Donald Trump said the FBI, the U.S. federal police agency, was investigating an affair between Jensen Huang and the alleged spy.

Jensen Huang has admitted that he was unfaithful to his wife, but he did not name the person involved. Nvidia has announced that it is conducting an independent investigation into reports that Huang was the target of a foreign intelligence effort.

Huang co-founded Nvidia in 1993. The shareholder complaint and the company's investigation are separate proceedings, and the lawsuit has not yet been decided in court.