Nvidia and CEO Jensen Huang have been sued by shareholders in a proposed class-action lawsuit alleging that they concealed information about Huang’s reported relationship with Alice Huang, a former executive at Singapore-based data centre company Megaspeed International, who has been linked to alleged Chinese intelligence activities.
According to Reuters, the complaint was filed in federal court in San Jose, California. Shareholders led by Mark Kistenmacher allege that Nvidia failed to disclose potential national security concerns that could affect the company’s reputation and business prospects.
They are seeking unspecified damages. Alice Huang is not related to Jensen Huang.
The lawsuit follows a 4.3% decline in Nvidia shares on Monday, wiping approximately $190 billion off its market capitalisation.
Reuters reported that the lawsuit was filed five minutes after the US stock market closed.
The development follows reports by The New York Times that US authorities had identified Alice Huang as a Chinese intelligence asset.
Reuters has noted that it could not independently verify the intelligence allegation, which China has denied.
Nvidia’s board has launched an independent investigation into whether Jensen Huang was targeted by a foreign intelligence operation.
The board said it had no reason to believe that national security or company secrets were compromised. Huang has agreed to cooperate with the review and remains CEO.
Nvidia did not immediately respond to Reuters’ request for comment on the shareholder lawsuit. The allegations have not been established in court.
