NVIDIA CEO Jensen Huang faces class action lawsuit amid scandal

NVIDIA shares fell by over 4 percent, with intraday drops reaching 8.8 percent, following reports that CEO Jensen Huang admitted to an affair with a business executive suspected of being a Chinese intelligence asset. The scandal has triggered a class action lawsuit from investors alleging that Huang and NVIDIA concealed risks related to the affair and national security.

NVIDIA’s board of directors has launched an independent investigation into whether Huang was targeted by a foreign intelligence agency. While the company stated there is no current reason to believe US national security or corporate secrets have been compromised, US intelligence authorities are reportedly investigating Megaspeed, a Singapore-based data center firm where the executive, Alice Huang, was employed. Investigators are looking into whether the firm was involved in smuggling restricted NVIDIA AI chips to China.

The situation has raised concerns regarding the stability of the AI industry, as Huang is considered a central figure in the sector. Experts note that NVIDIA holds a 90 percent market share in AI semiconductor training chips, and the company currently lacks a clear successor to Huang.