Nvidia and its CEO Jensen Huang are facing a proposed shareholder class-action lawsuit over allegations that the company concealed information about Huang's alleged relationship with a woman suspected of having links to Chinese intelligence. The lawsuit accuses the chipmaker and its chief executive of misleading investors by failing to disclose information that could have raised national security concerns and affected the company's reputation and business prospects, Reuters reported.
The complaint was filed in a federal court in San Jose, California, on Monday. It alleges that Nvidia and Huang withheld information about Huang's alleged affair with Alice Huang, a former executive at Singapore-based Megaspeed who is not related to him.
According to Reuters, the lawsuit follows a report last month that US authorities had concluded Alice Huang was a Chinese intelligence asset.
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The development comes after Nvidia announced an investigation into the matter on Sunday. Huang had earlier told company employees that he had been unfaithful to his wife, although he did not disclose details of the alleged relationship.
Huang co-founded Nvidia and has led the California-based company through its rise to become the world's most valuable chipmaker, making him one of the most prominent business leaders associated with the artificial intelligence boom.
Nvidia Shares Fall 4.3%
The allegations and the company's response have also brought investor attention to the potential business implications. Nvidia shares declined 4.3% on Monday, wiping out approximately $190 billion from its market capitalisation.
The lawsuit was filed five minutes after the US stock market closed, Reuters reported.
Shareholder lawsuits commonly follow unexpected declines in a company's share price. The investors, led by Mark Kistenmacher, are seeking unspecified damages from Nvidia and Huang.
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