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Nvidia, Jensen Huang sued over national security concerns after CEO's affair with suspected Chinese spy
The lawsuit claims Jensen Huang misled investors by hiding the alleged relationship which could hurt the company's reputation and business prospects.
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Nvidia and its founder, Jensen Huang, were sued on Monday by shareholders who claimed the company hid details of the CEO's alleged relationship with a businesswoman accused of being a Chinese spy.
The lawsuit, filed in a federal court in California's San Jose, claims Nvidia and Huang misled investors by failing to disclose the alleged relationship and the national security concerns surrounding it. The issue could damage Nvidia's reputation and affect its business prospects, the shareholders say, as per Reuters.
According to the complaint, the Nvidia chief had an extramarital affair with Alice Huang, a former executive at Singapore-based Megaspeed. Last month, US authorities concluded Alice Huang was an asset of Chinese intelligence, The New York Times reported. US intelligence agencies suspected Alice Huang of working for China's ministry of state security, the country's main intelligence agency.
Deep Dive
ALSO READ | Nvidia CEO Jensen Huang acknowledges affair with alleged Chinese spy as tech giant launches probe
Jensen Huang acknowledges cheating on wife
On Sunday, in a letter to staff, Jensen Huang told Nvidia employees that he had been “unfaithful” to his wife of 40 years. He did not provide information about the person involved.
“My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry,” Jensen Huang said in the statement, referring to wife Lori. “To my wife and family: I love you,” Huang said. “I know an apology cannot undo what I have done. I hope our family will heal and that, over time, I can earn back your trust.”
Huang also apologised to Nvidia employees, board members, business partners and shareholders, saying he regretted falling short of his responsibilities and would work to regain their trust. Huang co-founded Nvidia and has led the company as it grew into the world's most valuable chipmaker.
Separately, three Republican House committee chairs asked Huang to discuss his alleged links with Alice Huang in a closed-door meeting, according to Axios. US President Donald Trump said on Monday the FBI was looking into the Nvidia CEO's affair with Alice Huang.
ALSO READ | Trump says FBI probing Nvidia CEO Jensen Huang as China controversy deepens
China calls reports a 'smear campaign'
On Monday, Chinese officials denied involvement in such a scheme, the AP reported. Chinese foreign ministry spokesperson Guo Jiakun said, "These reports are groundless speculation, and a smear against China."
Yu Jing, spokesperson for the Chinese embassy in India, also rejected the claims. She said, “China firmly rejects the so-called 'Chinese spy' allegations involving NVIDIA CEO Jensen Huang.”
Nvidia launches independent investigation
Nvidia also announced an independent investigation into allegations involving its CEO and Alice Huang. The company's board of directors said on Sunday that an independent committee, assisted by external legal advisers, would oversee the inquiry.
ALSO READ | Elon Musk, Bill Ackman voice support for Jensen Huang after affair admission: ‘Humans make mistakes’
In a statement, Nvidia said, “While the Board has no reason to believe that either national security or Nvidia secrets were compromised, the Board's inquiry will examine all available information. Jensen fully supports the review and has committed to cooperating with it. The Board has confidence in Jensen and his leadership team and will provide further updates as appropriate.”
Nvidia has previously said that Huang's interactions with customers, including Alice Huang, were "not unusual". The company has also denied the allegations as "baseless", saying that customers such as Megaspeed do not have access to classified commercial information.
How they were caught
US authorities reportedly gathered information about Alice Huang through electronic surveillance. She worked as a senior executive at Megaspeed, a Singapore-based company that came under scrutiny over suspected attempts to move restricted Nvidia chips into China.
ALSO READ | Row over alleged Chinese spy puts Jensen Huang’s leadership of Nvidia under scrutiny
US officials suspected that Megaspeed helped move advanced Nvidia processors into mainland China despite American export restrictions.
Industry records cited in the report suggested that Megaspeed had purchased around $2 billion worth of Nvidia products despite having a limited physical presence in the region. The company builds data centres across Southeast Asia and leases computing capacity to Chinese technology giant Alibaba.
