A retail investor says Nvidia and Jensen Huang misled the market about the chief executive's relationship with a former Megaspeed executive suspected of working for Chinese intelligence. The company's shares lost about US$190 billion in value on Monday.
A Nvidia shareholder sued the company and its chief executive Jensen Huang on Monday in federal court in San Jose, California, accusing them of giving false and misleading information in response to media reports about Huang's relationship with a woman suspected of helping China evade United States export controls on the company's artificial intelligence chips, Courthouse News Service reports. The complaint followed Huang's acknowledgement on Sunday that he had a relationship with the woman, Alice Huang, and the opening of an investigation by Nvidia's board.
The plaintiff, retail investor Mark Kistenmacher, seeks to represent everyone who bought Nvidia shares between 9 October, when the New York Times first reported the affair, and 8 November, when the company said it was investigating reports that Huang was the "target of a foreign intelligence effort", the Taipei Times reports. The complaint seeks unspecified damages and a jury trial. Nvidia's shares fell 4.3 percent on Monday, wiping out about US$190 billion in market value.
According to the complaint, Nvidia's earlier statement that its compliance team had examined Megaspeed International, a Singapore-based company looking to buy about US$2 billion of Nvidia technology, and found no diversion to China was "materially false and misleading" because of the chief executive's relationship with Alice Huang, a Megaspeed executive. The suit pleads violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 against Nvidia and Huang, and of Section 20(a) against Huang. The shareholder is represented by Laurence Rosen of The Rosen Law Firm in Los Angeles. Nvidia did not respond to a request for comment after business hours.
The Taipei Times reports that the New York Times said United States intelligence had determined Alice Huang was gathering information for Beijing, and that Megaspeed bought more than US$4.8 billion of Nvidia chips over the past two years. President Donald Trump said the FBI is investigating the affair and that Huang told him he had no idea the person could be involved in espionage.
