Why NVIDIA and Jensen Huang have been sued by shareholders
What's the story
NVIDIA and its CEO, Jensen Huang, are facing a lawsuit from shareholders over an alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed. The complaint was filed in federal court in San Jose, California. It alleges that both NVIDIA and Jensen misled shareholders about the matter's potential national security implications for the tech giant.
Espionage claims
Allegations of affair with potential national security risks
The lawsuit comes amid allegations that Alice is a Chinese intelligence asset. This claim was reported by The New York Times.
The shareholders argue that the alleged affair poses national security risks, tarnishes NVIDIA's reputation, and jeopardizes its business prospects.
Following the news of the investigation into Huang's alleged affair with Alice, NVIDIA shares plummeted by 4.3% on Monday, wiping out about $190 billion from its market capitalization.
Investigation initiated
NVIDIA launches independent investigation into the matter
Jensen has admitted to being unfaithful to his wife, Lori, but did not disclose details about the alleged affair.
He co-founded NVIDIA in 1993 and has been instrumental in its rise as a leading chipmaker.
In light of these developments, NVIDIA announced an independent investigation into reports that Huang was the "target of a foreign intelligence effort."
The company's board of directors said an independent committee, assisted by external legal advisers, would oversee the inquiry.
Cooperation assured
Jensen Huang expresses support for investigation
In an open letter on NVIDIA's website, Huang said he supports the investigation and will fully cooperate.
He emphasized his love for his country and company, and his commitment to protecting NVIDIA while supporting America's national security.
Meanwhile, three Republican House committee chairs have asked Huang to discuss his alleged links with Alice in a closed-door meeting.
Denial issued
China denies involvement in espionage claims
Chinese officials have denied any involvement in the alleged espionage scheme.
Guo Jiakun, a spokesperson for China's Foreign Ministry, called the reports "groundless speculation" and a smear against China.
Yu Jing, a spokesperson for the Chinese Embassy in India, also rejected the claims. She said China firmly rejects the so-called "Chinese spy" allegations involving the NVIDIA CEO.