Investors blast Nvidia over avalanche of AI copyright suits

(CN) — A stockholder filed suit against tech giant Nvidia’s board of directors and CEO Jen-Hsun Huang, claiming they knowingly allowed the company to use stolen copyrighted materials for financial gain.

Nvidia makes the computer chips that sparked surging advances in artificial intelligence. Its chips are used by all “frontier AI” companies including those developing leading large language models and autonomous agents.

The company has recently been the target of several lawsuits by authors and content creators who say it trained its large language models on datasets and so-called shadow libraries — online repositories hosting pirated books and other copyrighted works — that contained their copyrighted works without permission.

Plaintiff Jessica Berliner claims company officers are responsible for the company’s enormous library of pirated datasets and copyrighted works, taken without author consent or compensation and used to train large language models, vision-language models and voice cloning models.

The stolen materials include full-length books, YouTube videos and thousands of hours of human speech recordings, Berliner says.

Though Huang and his fellow defendants have not personally scraped the data used to train Nvidia’s models, Berliner says it was their responsibility to exercise control over the illegal acts either directly or indirectly.

“Nvidia is now saddled with having to defend itself in copyright infringement cases and BIPA violating cases as a result of defendants’ misconduct and is facing potentially massive liability and related costs and reputational damages,” Berliner says in the 108-page complaint.

The defendants did approve proxy statements over several years filed with the Securities and Exchange Commission that boasted a specific focus on information security and privacy protections as well as the advancement of “trustworthy AI” founded in the company’s core values and code of conduct.

The proxy statements did not disclose Nvidia’s training materials obtained data without necessary licenses and permissions, Berliner says. The 2026 SEC report “conspicuously omitted” these apparently false representations, which she says further evidences the deceit.

“These statements were materially false and misleading because they led the market and the company’s shareholders to believe that Nvidia had complied with all laws, including copyright laws, in the development of its AI,” Berliner says in the complaint.

The effect of the misleading statements and omissions was an artificially inflated stock price.

Following a share repurchase program, Nvidia’s stock price skyrocketed from around $624 in January 2024 to $1,208 in June 2024. Now, Berliner says the stock continues to fall as the lawsuits pile up.

“The declines in the price of Nvidia common stock after the disclosures came to light were a direct result of the nature and extend of the defendant’s fraud finally being revealed to investors and the market and a materialization of the undisclosed risks alleged herein,” Berliner says in the complaint.

The focus of the copyright suits against Nvidia stem from a dataset known as “The Pile,” which included a subcollection of nearly 200,000 pirated books called Books3, itself sourced from the shadow library Bibliotik. The plaintiffs say Nvidia used The Pile to train models in its Megatron line.

Plaintiffs in a similar suit in Illinois federal court this year claim Nvidia and Microsoft obtained recordings of their voices and extracted their unique biometric signatures for training.

The board members and directors listed in the suit alongside Huang include Tench Coxe, John Dabiri, Dawn Hudson, Harvey Jones, Melissa Lora, Stephen Neal, A. Brooke Seawell, Aarti Shah, Mark Stevens, Ajay Puri, Deborah Shoquist, and Timothy Teter. The board members alone have 181 years collectively running Nvidia and Berliner says they knew or should have known their misrepresentations and infringement were violations of their responsibility to the company and to stockholders.

They did so anyway in the pursuit of profits, Berliner says.

Huang alone earned $120.4 million between 2023 and 2025, and holds shares worth $173.9 billion, according to Berliner.

Berliner’s claims include breach of fiduciary duty and securities violations. She wants the court to direct Nvidia to take “all necessary actions” to improve its internal procedures to comply with the law, and to disgorge any benefits wrongly obtained by Huang and the board members.

She’s represented by David Wissbroecker of Bottini & Bottini in La Jolla, California.

Nvidia did not respond to a request for comment by press time.