Nvidia shareholders sue company over CEO Jensen Huang scandal
Nvidia shareholders have accused the company and its CEO, Jensen Huang, of concealing information about the executive's alleged relationship with a Chinese intelligence operative. Amid the scandal, shares of the chipmaker fell 4.3%, wiping approximately $190 billion off its market capitalization.
According to Reuters, the lawsuit was filed in federal court in San Jose, California. The plaintiffs allege that Nvidia and Huang misled investors by failing to disclose circumstances that could pose a threat to U.S. national security and affect the company's business prospects.
The case concerns the CEO's alleged relationship with Alice Huang, a former employee of Singapore-based Megaspeed. According to media reports, U.S. authorities concluded that the woman had ties to Chinese intelligence.
Nvidia launches investigation as FBI examines allegations
On November 9, U.S. President Donald Trump said the Federal Bureau of Investigation (FBI) was examining the circumstances surrounding the alleged relationship between Nvidia's CEO and Alice Huang.
However, the president expressed confidence that Huang had no reason to fear repercussions. According to Trump, he personally spoke with the executive, who said he knew nothing about the woman's alleged intelligence activities.
A day earlier, Nvidia announced an independent investigation into reports that its CEO may have been targeted by a foreign intelligence operation.
Huang himself acknowledged marital infidelity in a message to employees but did not disclose details of the relationship. He also pledged to cooperate fully with the investigation.
"I support the investigation and will cooperate fully. I love our country and our company," the Nvidia CEO said, emphasizing the importance of protecting U.S. national security.
Investors seek damages after Nvidia stock decline
The lawsuit was filed five minutes after the U.S. stock market closed on November 9. The shareholder group is led by individual investor Mark Kistenmacher, who, along with other plaintiffs, is seeking unspecified damages.
The defendants have not yet publicly responded to the substance of the allegations. However, the filing of a lawsuit does not establish that the company or its CEO violated any laws.
Despite the sell-off, some market participants expect Nvidia shares to recover. A large options position has emerged, betting on a rise in the chipmaker's stock over the coming months.
The strategy runs through February and could generate a profit if the share price exceeds approximately $206. The position suggests that some traders expect Nvidia shares to return to previous highs, although it does not guarantee a market recovery.
Earlier, we reported that Nvidia unveiled its Vera processor, designed to improve the performance of artificial intelligence systems.
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