Nvidia, CEO Jensen Huang face shareholder suit over affair
Shareholders have sued Nvidia and CEO Jensen Huang for allegedly misleading them about his affair with an accused Chinese spy, causing stock to tumble.
Tech titan Jensen Huang faced fresh turmoil on Tuesday as shareholders sued him and his company for allegedly misleading them over his affair with an accused Chinese spy. The Rosen Law Firm said it had filed a class-action lawsuit in federal court in San Jose, California, accusing Huang and AI behemoth Nvidia of failing to disclose information to shareholders about the Nvidia CEO's links to the woman accused of funneling information to Beijing.
The New York Times reported last month that Taiwanese-born Huang developed a close relationship with Alice Huang, a Chinese executive linked to Singapore-based data center company Megaspeed, which buys AI chips from Nvidia. The woman isn't related to the 63-year-old CEO.
National Security Concerns
Nvidia said it launched an independent investigation of Huang. Two law enforcement sources confirmed to CBS News on Monday that the Justice Department's National Security Division is investigating Megaspeed over potential violations of U.S. export restrictions on advanced AI chips. Shares of the chipmaker tumbled after Nvidia's board opened an inquiry into reports that its CEO had been "the target of a foreign intelligence effort," which Beijing denies.
My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry.
Market Impact
The lawsuit asserted that Huang and Nvidia misled shareholders about the national security concerns raised by the affair, and that their misleading statements "artificially inflated" Nvidia's share price. "As a result of Defendants' wrongful acts and omissions, and the precipitous decline in the market value of the Company's securities, Plaintiff and other Class members have suffered significant losses and damages," the lawsuit alleges.
Huang is a central figure in the artificial intelligence boom and a close informal adviser to President Trump, who has repeatedly opposed regulating the industry so China doesn't gain the upper hand. China is in a race for tech dominance against the United States, which restricts the export to China of the most cutting-edge silicon chips.
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