Nvidia Shareholders Sue Over Alleged Spy Cover-Up
Nvidia shareholders file class-action lawsuit against CEO Jensen Huang over alleged Chinese spy affair cover-up.
2 min read
Nvidia shareholders have filed a class-action lawsuit against the AI chip giant and CEO Jensen Huang, accusing them of hiding what investors should have been told about Huang’s relationship with a woman accused of being a Chinese spy.
Shareholders Alleging National Security Concerns
The lawsuit, filed in federal court in San Jose, California, centers on reports that Huang, born in Taiwan, developed a close relationship with Alice Huang, a Chinese executive tied to Megaspeed, a Singapore-based data center company that buys AI chips from Nvidia. The case claims that Huang and Nvidia misled shareholders about the national security concerns the relationship raised, and that the omission artificially propped up Nvidia’s share price.
Nvidia Denies Impropriety
Nvidia denied an improper relationship before Huang eventually admitted it on Sunday. The company stated that Megaspeed is an ordinary regional customer and that Huang’s meetings with Alice Huang are routine CEO interactions with customers. A Nvidia spokesman, John Rizzo, said, “Jensen’s interactions with Ms. Huang are not unusual or unexpected. Meetings with customers are part of a C.E.O.’s job; Jensen talks with thousands of customer executives every year.” Rizzo added that Nvidia is “confident that if the U.S. government believes that any person is a threat to American industry, it would let us know,” and that customers like Megaspeed “receive ordinary business information — not sensitive Nvidia trade secrets — and zero information relevant to national security.”
Legal Action and Investigation
The law firm of Schall, Brown & Schwartz was the first to launch an investigation of Nvidia over the Chinese spy scandal. The class-action lawsuit was then filed by the Rosen Law Firm. The lawsuit claims Huang and Nvidia misled shareholders about the national security concerns the relationship raised, and that the omission artificially propped up Nvidia’s share price. “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 complaint states.
U.S. Government Investigation
Nvidia has said it launched an independent investigation into Huang. The company’s board opened its inquiry after reports described Huang as “the target of a foreign intelligence effort,” and Nvidia shares fell in the aftermath. Beijing has denied the allegation. Two law enforcement sources told CBS News on Monday that the Justice Department’s National Security Division is investigating Megaspeed over potential violations of U.S. export restrictions on advanced AI chips. Washington limits the export to China of most cutting-edge silicon chips as the two countries compete for dominance in technology.
Jensen Huang’s Admission
On Sunday, Huang sent a message to Nvidia employees admitting 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 wrote.
Source: Breitbart
