Nvidia, Jensen Huang sued by shareholders over alleged affair with suspected Chinese spy

Nvidia and its chief executive Jensen Huang have been sued by shareholders in the United States over allegations that the company concealed information about his alleged relationship with Alice Huang, a former executive of Singapore-based Megaspeed who US authorities reportedly identified as an asset of Chinese intelligence.

The proposed class-action lawsuit, filed in a federal court in San Jose, California, on Monday, accuses Nvidia and Huang of misleading investors by failing to disclose the alleged relationship and the potential national security concerns surrounding it. The plaintiffs argue that the revelations could damage the chipmaker's reputation and threaten its business prospects.

The shareholders, led by Mark Kistenmacher, are seeking unspecified damages, alleging that the company failed to inform investors about risks associated with the matter. The lawsuit was filed shortly after Nvidia shares fell 4.3 per cent on Monday, wiping approximately $190 billion off the company's market capitalisation.

According to the complaint, the alleged relationship involved Alice Huang, who previously worked at Megaspeed. The New York Times reported last month that US authorities had concluded she was an asset of Chinese intelligence. American intelligence agencies suspected her of working for China's Ministry of State Security, the country's principal intelligence agency.

Alice Huang is not related to the Nvidia chief.

Jensen Huang admits to being unfaithful to wife

The lawsuit comes a day after Jensen Huang acknowledged being unfaithful to his wife of 40 years, Lori, in a letter addressed to Nvidia employees. However, he did not identify the person involved or provide details of the alleged relationship.

"My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry," Huang said in the statement.

Expressing his love for his wife and family, he added: "To my wife and family: I love you."

Huang acknowledged that an apology could not undo his actions but said he hoped his family would heal and that he could gradually regain their trust.

He also apologised to Nvidia employees, board members, business partners and shareholders, saying he regretted falling short of his responsibilities and would work to restore their confidence.

Huang co-founded Nvidia and has led the company through its transformation into the world's most valuable chipmaker, making him one of the most prominent figures in the global artificial intelligence industry.

Meanwhile, three Republican chairmen of US House committees have sought a closed-door meeting with Huang to discuss his alleged links with Alice Huang and the national security implications.

US President Donald Trump also said on Monday that the Federal Bureau of Investigation (FBI) was looking into the Nvidia chief's alleged affair with Alice Huang.

China rejects allegations as 'smear campaign'

China has dismissed reports linking Alice Huang to its intelligence agencies, describing the allegations as baseless.

Chinese foreign ministry spokesperson Guo Jiakun rejected the claims on Monday, saying, "These reports are groundless speculation, and a smear against China."

Yu Jing, spokesperson for the Chinese embassy in India, also denied the allegations involving the Nvidia chief.

"China firmly rejects the so-called 'Chinese spy' allegations involving NVIDIA CEO Jensen Huang," she said.

Nvidia orders independent investigation

Amid growing scrutiny, Nvidia's board of directors announced on Sunday that it would initiate an independent investigation into allegations involving Huang and Alice Huang.

The inquiry will be overseen by a committee of independent directors and supported by external legal advisers. The company said the investigation would examine all available information, including concerns about a possible foreign intelligence effort.

"While the Board has no reason to believe that either national security or Nvidia secrets were compromised, the Board's inquiry will examine all available information," Nvidia said in its statement.

The company added that Huang fully supported the review and had committed to cooperating with the investigation. It also expressed confidence in his leadership and said it would provide further updates when appropriate.

Nvidia had previously described Huang's interactions with customers, including Alice Huang, as "not unusual". It also dismissed the allegations as "baseless", maintaining that customers such as Megaspeed did not have access to classified commercial information.

US lawmakers seek answers over alleged Chinese links

The controversy has also attracted attention on Capitol Hill, with three senior Republican lawmakers seeking answers from Huang about his interactions with Alice Huang and Nvidia's safeguards against foreign intelligence operations.

Brian Mast, chairman of the House Foreign Affairs Committee, John Moolenaar, chairman of the House Select Committee on China, and Rick Crawford, chairman of the House Permanent Select Committee on Intelligence, requested a joint, closed-door briefing with the Nvidia chief.

In a letter dated November 4, the lawmakers raised concerns about China's potential access to sensitive American technology and information. They requested that Huang appear before the committees on November 18 and asked him to confirm the date or suggest an alternative by November 11.

The lawmakers also sought details about Nvidia's security protocols to prevent espionage by foreign adversaries.

How US authorities reportedly tracked Alice Huang

US authorities reportedly gathered information about Alice Huang through electronic surveillance as part of investigations into her alleged links with Chinese intelligence.

She previously served as a senior executive at Megaspeed, a Singapore-based company that came under scrutiny over suspected attempts to move restricted Nvidia processors into China despite American export controls.

US officials suspected that Megaspeed helped facilitate the transfer of advanced Nvidia chips to mainland China in violation of export restrictions.

Industry records cited in reports suggested that Megaspeed had purchased approximately $2 billion worth of Nvidia products despite having a limited physical presence in the region.

The company builds data centres across Southeast Asia and leases computing capacity to Chinese technology giant Alibaba.

The allegations have raised questions about whether sensitive commercial or national security-related information could have been exposed through the alleged relationship. However, Nvidia has maintained that it has no reason to believe its secrets or national security interests were compromised, and the company's independent investigation is expected to examine the available evidence.