Nvidia shareholders sued the chipmaker and its CEO, Jensen Huang, on Monday, accusing them of concealing his alleged relationship with a suspected Chinese intelligence asset.
The proposed class action adds to investigations into whether Huang was targeted by foreign intelligence, raising questions about the security of sensitive information at the world’s most valuable chipmaker.
The Lawsuit
The complaint, filed in federal court in San Jose, alleges that Nvidia and Huang misled investors about his relationship with Alice H., a former executive at Singapore-based Megaspeed.
Shareholders say the defendants failed to disclose national security concerns that threatened Nvidia’s reputation and business prospects. They are seeking unspecified damages.
The New York Times reported last month on the alleged relationship and said US authorities had concluded that Alice H. was a Chinese intelligence asset.
The Admission
Nvidia announced an independent investigation Sunday into reports that Huang had been the “target of a foreign intelligence effort.”
Huang acknowledged being unfaithful to his wife in an open letter, but did not identify the woman.
“I support the investigation and will cooperate fully,” he said. “I am committed to protecting NVIDIA and supporting America’s national security.”
Nvidia shares closed down 4.3% Monday. The lawsuit was filed five minutes after US markets closed.
The Response
President Donald Trump said Monday that the FBI was investigating the matter, while expressing support for Huang. Trump said he had spoken to the executive earlier that day.
“He said he had absolutely no idea that the person in question was a spy,” Trump told reporters.
China denied conducting an intelligence operation targeting Huang. “The so-called Chinese spy allegation is unsubstantiated. It is nothing but smears against China,” Foreign Ministry spokesperson Guo Jiakun said.
The Bottom Line
Nvidia shareholders have sued the company and CEO Jensen Huang for allegedly concealing his relationship with a suspected Chinese spy. Huang admitted to being unfaithful to his wife but denied knowing the woman was a spy. The FBI is investigating. Nvidia shares fell 4.3%.
My Opinion
Jensen Huang built the most valuable company in the world. Then he allegedly handed the keys to the Chinese government.
Huang says he had no idea the woman was a spy. Maybe. But he is the CEO of a company worth more than most countries. He should have known.
Instead, he admitted to being unfaithful in a public letter, announced an “independent investigation” into himself, and said he was committed to national security. That is not a defense. That is a confession dressed up as an apology.
The shareholders are right to sue. If Huang compromised national security because he could not keep his pants on, that is a breach of fiduciary duty. That is a threat to the country.
Trump says Huang had “no idea.” Maybe. But the American people deserve more than a gut feeling from the president.
