Nvidia and CEO Jensen Huang Face Lawsuit Over Alleged China Ties

Nvidia and CEO Jensen Huang face a shareholder lawsuit regarding undisclosed ties to an alleged Chinese intelligence asset. The company's board has launched an internal investigation as US lawmakers raise questions over technology export security.

Nvidia Faces Shareholder Lawsuit Over Alleged Intel Ties

Nvidia and its Chief Executive Jensen Huang have been sued in a proposed class-action lawsuit accusing them of misleading shareholders by concealing Huang's alleged ties to a woman suspected of working for Chinese intelligence, adding to growing scrutiny over the chipmaker's business and national security exposure, according to a Reuters report.

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 national security concerns it raised, which the shareholders claim threatened the company's reputation and business prospects.

Details of the Alleged Relationship

The lawsuit concerns Huang's alleged relationship with Alice Huang, a former executive of Singapore-based data centre firm Megaspeed. The New York Times reported last month that US authorities had concluded she was a Chinese intelligence asset.

Nvidia's board announced an investigation into the matter on Sunday, with independent directors engaging external legal counsel to examine the circumstances surrounding the relationship. The company has maintained that there is no evidence that national security or proprietary corporate information was compromised, according to earlier reports.

Legal and Political Fallout

The proposed class-action lawsuit, filed by shareholders led by Mark Kistenmacher, alleges that Nvidia and Huang failed to disclose the relationship and the national security concerns surrounding it. The shareholders are seeking unspecified damages, Reuters reported.

Huang had earlier addressed the personal matter in a communication to employees, acknowledging his infidelity. "I was unfaithful to my wife," he said.

The controversy has also drawn attention from US lawmakers 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 answers from Commerce Secretary Howard Lutnick on the administration's export policies, while Republican lawmakers have also sought a closed-door discussion with Huang.

Nvidia shares closed 4.3 per cent lower on Monday, wiping out approximately USD 190 billion from the company's market capitalisation, Reuters reported. The lawsuit was filed five minutes after the US stock market closed.

The legal proceedings and ongoing board investigation could keep attention on Nvidia's disclosure practices and the scrutiny surrounding its technology exports as the company faces questions over the alleged relationship and its potential implications. (ANI)

(Except for the headline, this story has not been edited by Asianetnews Editorial staff and is published from a syndicated feed.)