Nvidia and CEO Jensen Huang face class-action lawsuit over Chinese spy affair

Los Angeles: Tech titan Jensen Huang faced fresh turmoil on Tuesday as shareholders sued him and his firm for allegedly misleading them over his affair with an accused Chinese spy.

US-based Rosen Law Firm said it had filed a class-action lawsuit accusing Huang and AI behemoth Nvidia of failing to disclose information to shareholders about his links to the woman who is accused of funneling information to Beijing.

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The New York Times reported last month that Taiwanese-born Huang developed a close relationship with Alice Huang, a Chinese executive linked to Singapore-based data center company Megaspeed.

The woman is no relation to the 63-year-old Nvidia CEO.

Shares of the chipmaker tumbled after Nvidia's board opened an inquiry into reports that its CEO had been "the target of a foreign intelligence effort," which Beijing denies.

China is in a race for tech dominance against the United States, which restricts the export to China of the most cutting-edge silicon chips.

Nvidia, a global leader in producing chips used to train and run AI models, is one of the world's most valuable companies.

The lawsuit filed in a California federal court on Monday said Huang and Nvidia misled shareholders about the national security concerns raised by the affair, and that their misleading statements "artificially inflated" Nvidia's share price.

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"As a result of Defendants' wrongful acts and omissions, and the precipitous decline in the market value of the Company's securities, Plaintiff and other Class members have suffered significant losses and damages," the lawsuit alleges.

Huang admitted in a message to Nvidia employees released on Sunday that he had been "unfaithful" to his wife.

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

Huang is a central figure in the artificial intelligence boom and a close informal advisor to US President Donald Trump, who has repeatedly opposed regulating the industry so that China does not gain the upper hand.