Nvidia shares fall 4.27% as Jensen Huang affair prompts lawsuit

What happened: Nvidia's board opened an inquiry on Sunday, 8 November, into reports that Jensen Huang had been the target of a foreign intelligence effort, which Beijing denies. The board said it had no reason to believe national security or Nvidia secrets were compromised, according to CBS News and TechCrunch. The same day, Huang told employees he had been unfaithful to his wife. He referred to a relationship with Alice Huang, a Chinese executive linked to Megaspeed. Alice Huang is not related to him.

The numbers: Nvidia shares fell $7.97, or 4.27%, on Monday, 9 November, the first trading day after the announcement. The named plaintiff, retail investor Mark Kistenmacher, made seven purchases this year totalling about $20,500. The proposed class covers anyone who bought Nvidia securities from 9 October 2025 to 8 November 2026.

The context: Megaspeed is a Singapore-based data centre company that buys AI chips from Nvidia. Two law enforcement sources told CBS News that the Justice Department's National Security Division is investigating Megaspeed over potential breaches of US export restrictions on advanced AI chips. The New York Times reported last month that Huang had developed a close relationship with Alice Huang.

In their words: Huang, in his message to employees: "My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry."

Why it matters: Rosen Law Firm filed a securities class action in the Northern District of California, naming Nvidia and Huang. The complaint says they misled investors about his Megaspeed ties. It cites three statements, including a spokesperson's claim that the relationship was not unusual, and argues all three were misleading because of the affair. Stanford securities law professor Robert Bartlett said he expects a filing and called the spokesperson's statement clearly misleading. Because Huang is CEO, Bartlett said, his knowledge is imputed to the company.

The catch: At least four firms, including Schall, Brown & Schwartz and Levi & Korsinsky, have announced investigations into whether Nvidia misled investors. Law-firm announcements do not by themselves indicate a strong case. Reports of the board's Sunday statement are secondhand.

What's next: The court will choose a lead plaintiff, usually the investor with the largest loss. Nvidia says it has launched an independent investigation of Huang.