Nvidia CEO Jensen Huang Accused of Defrauding Shareholders Over Spy Affair

A day after the Jensen Huang spy scandal erupted, the potential repercussions for Nvidia are beginning to emerge, with a proposed class action lawsuit accusing the US chipmaking giant and its CEO of defrauding shareholders by concealing Huang’s extramarital affair with an alleged Chinese spy. Huang on Sunday, November 8, admitted to the affair with Singapore-based Megaspeed’s Alice Huang, who is believed by US intelligence agencies to have spied for China. Nvidia’s board of directors announced that it has opened an independent investigation into Jensen Huang to determine whether he was the target of a suspected ‘honeytrap’ operation by foreign intelligence. Nvidia’s stock slid more than 4 per cent on Monday, November 9, the first trading day after the controversy escalated, reducing the trillion-dollar firm’s market ⁠capitalisation by approximately $190 billion. Separately, four other securities firms, including Schall, Brown & Schwartz and Levi & Korsinsky, have announced their own investigations into whether Nvidia misled investors, according to a report by TechCrunch. While it might be common for shareholders to ⁠sue ​companies after unexpected share price declines, the controversy involving Jensen Huang is quite serious as it has raised questions about corporate oversight at Nvidia, including whether the company’s directors and senior executives were aware of the relationship and if Huang himself was aware of Alice Huang’s China connections. Huang is also expected to face inquiries by the US Congress, with the incoming Democratic-led majority, alongside probes by the Federal Bureau of Investigation (FBI) and other US government agencies. The lawsuit has been filed in federal court in San Jose, ​California, by Rosen Law Firm, a New York-based law firm that specialises in securities class actions, on behalf of Mark Kistenmacher, according to news reports. Kistenmacher is reportedly a retail investor who made seven purchases totaling roughly $20,500 this year. The lawsuit names both Nvidia and Jensen Huang as defendants. Since the complaint has been filed as a proposed class action, anyone who bought Nvidia securities between October 9, 2025, and November 8, 2026, could be allowed to join the suit. The lawsuit has accused Nvidia of misleading shareholders by failing to disclose Huang’s affair with Alice Huang. It also pointed out the national security concerns stemming from the affair, which have allegedly put Nvidia’s reputation and business prospects at risk. It has cited three statements as proof of its allegations. The relationship between the two Huangs was first reported by The New York Times last month, and was followed by US authorities concluding that Alice Huang was a Chinese intelligence asset. Nvidia’s initial response was to pushback against these reports, with company spokesperson John Rizzo claiming that Huang’s interactions with Alice Huang were “not unusual or unexpected.” Nvidia earlier claimed that it found “no evidence of diversion” of its advanced AI chips to China via Megaspeed. In an interview with Bloomberg on October 30, Huang had also claimed that Nvidia’s dealings with Megaspeed were “normal and not unusual.” The lawsuit argued that all three of these statements were false or misleading because Huang was having an affair with Alice Huang. It makes the argument that Nvidia knew what its chief executive knew. The lawsuit seeks a jury trial and unspecified damages, along with interest and attorneys’ fees.