Nvidia faces a class-action lawsuit after a scandal involving its CEO cost the company $190 billion

Tech giant Nvidia and its CEO, Jensen Huang, are facing a class-action lawsuit filed by shareholders who accuse them of concealing material information regarding the businessman's extramarital affair with a woman alleged to have ties to the intelligence services of China.

The lawsuit was filed Monday in federal court in San Jose, California, by the Rosen Law Firm. According to Reuters, the plaintiffs allege that the company misled its investors by failing to disclose potential national security risks stemming from Huang's relationship with Alice Huang, a former executive at Megaspeed, a Singapore-based data center company.

The controversy began after The New York Times published information about the 63-year-old businessman's ties to the woman, whom U.S. authorities reportedly identified as a Chinese intelligence asset. Beijing has rejected the espionage allegations.

According to the press release from Rosen Law Firm, the lawsuit alleges that Nvidia made false or misleading statements that contributed to artificially inflating its stock price by concealing information that could affect its reputation and business prospects. The shareholders are seeking financial compensation for the damages they suffered.

Nvidia loses nearly $190 billion in a single day

The scandal sparked a strong reaction on Wall Street. Nvidia shares closed Monday down 4.27%, at $178.67, reducing its market capitalization by approximately $190 billion, according to Reuters.

During the trading session, the stock plummeted nearly 9% before recovering some of its losses. The lawsuit was filed after the market closed, so that drop cannot be attributed to the new legal action.

The decline adds to a downward trend for the tech giant, which has lost about $1.5 trillion in market value since its all-time high on Oct. 6, according to The Wall Street Journal. However, that cumulative decline also reflects broader concerns about valuations in the artificial intelligence sector.

Tech & Science

Nvidia opens investigation after its CEO Jensen Huang admits affair with businesswoman suspected of spying for Beijing

Carlos Dominguez

Huang admits to infidelity, and Nvidia launches an investigation

In a message to his employees released on Sunday, Huang acknowledged having been unfaithful to his wife and apologized for the harm caused to his family.

That same day, Nvidia's board of directors announced an independent investigation to determine whether its founder was the target of a foreign intelligence operation.

In an official statement, the company stated that, to date, it has no reason to believe that trade secrets or information related to national security have been compromised. It also expressed its support for Huang and confirmed its willingness to cooperate with the investigation.

The case comes amid trade and technology tensions between Washington and Beijing, particularly over U.S. restrictions on exports of advanced semiconductors used in artificial intelligence.

The class-action lawsuit covers investors who purchased Nvidia securities between Oct. 9, 2025, and Nov. 8, 2026. So far, it has not been established in court that Huang engaged in espionage activities or that confidential Nvidia information was handed over to China.