Nvidia investors file lawsuit against CEO amid espionage scandal

The scandal has reportedly wiped out approximately $190 billion in market value.

The lawsuit, filed in federal court in San Jose, California, accuses Nvidia and Huang of concealing Huang’s relationship with Alice H., a former manager at Singapore-based data center operator Megaspeed. US authorities suspect Alice H. of involvement in Chinese espionage.

Plaintiffs allege that concealing these circumstances artificially inflated stock prices and obscured national security concerns that could jeopardize the company’s reputation and business prospects.

Nvidia’s stock price plummeted following the revelations, dropping 4.27% to $178.67 on Monday, resulting in the substantial loss of market value.

The lawsuit, submitted shortly after the stock market closed, highlights that the stock decline could affect hundreds or thousands of shareholders.

Beyond the relationship itself, Nvidia’s partner company, Megaspeed, is also under scrutiny. Megaspeed is being investigated for potential violations of US export restrictions on advanced artificial intelligence chips.

The lawsuit questions how closely Nvidia monitors the whereabouts of its processors and warns of possible circumvention of American export laws.

US President Donald Trump confirmed that the FBI is investigating the matter. Following a conversation with Huang, Trump defended Huang, stating that Huang told him he had no knowledge that the woman was a spy.

Huang himself emphasized in an open letter that he fully supports the investigations and is committed to protecting US national security. Nvidia has also announced an independent internal investigation.

The Chinese government has strongly denied the allegations, dismissing the accusations of a spy operation as an unfounded smear campaign against China.