Nvidia and CEO Jensen Huang sued over alleged Chinese spy links
A proposed class-action lawsuit accuses the chipmaker of defrauding shareholders by concealing ties between Huang and a suspected intelligence asset.
Nvidia and Chief Executive Officer Jensen Huang have been sued in a proposed class-action lawsuit for allegedly defrauding shareholders. According to reports from the Times of India and Hindustan Times, the lawsuit claims the company concealed Huang's relationship with Alice Huang, a former executive at Singapore-based Megaspeed, who is suspected of being a Chinese intelligence asset.
The complaint, filed in a federal court in San Jose, California, alleges that the defendants misled investors regarding the relationship and failed to disclose national security concerns that could impact the company's business. Shareholders led by Mark Kistenmacher are seeking unspecified damages following a 4.3 per cent drop in Nvidia shares on Monday.
Nvidia's board of directors launched an independent investigation on Sunday into reports that Huang was targeted by a foreign intelligence operation. The company stated it has no reason to believe that confidential information or US national security has been compromised, though it will examine all available information. Huang has agreed to cooperate with the probe.
US authorities reportedly suspect that Alice Huang was recruited by China's Ministry of State Security to collect information about the Nvidia chief. Megaspeed, which purchases Nvidia's artificial intelligence chips, has also faced scrutiny over suspicions it helped Beijing access restricted processors.
Chinese Foreign Ministry spokesperson Guo Jiakun described the espionage allegations as baseless vilification. In a message to employees on November 8, Huang admitted to being unfaithful to his wife and apologised to his family, colleagues, and shareholders for his actions.
