False statements by Nvidia and its CEO Jensen Huang about suspected Chinese honeypot spy hurt stock price, investor claims
As an eye-popping scandal involving an alleged Chinese honeypot spy and a high-profile CEO roils Silicon Valley’s second-most-valuable company, an investor filed a lawsuit Monday claiming the company, Nvidia, and the CEO, Jensen Huang, made false statements that devastated its stock price.
Revelations that Huang, whose Santa Clara company makes artificial intelligence computer chips key to America’s AI race against China, cheated on his wife with an alleged spy have thrown the futures of the company and its leader into question.
CEO Huang’s admission of infidelity in a Sunday letter to Nvidia employees followed reports in the New York Times that he had been intimate with Alice Huang, also known as Huang Le, an executive with a Singaporean company under U.S. government investigation over suspicions it was routing advanced Nvidia chips to China. Meanwhile, according to the paper, Ms. Huang — no relation to Nvidia’s CEO — was believed by U.S. intelligence officials to be “feeding information directly to Beijing.” Ms. Huang has not publicly commented on the allegations.
Huang’s letter said that regarding “national security concerns,” the company’s board was investigating the matter and he would “cooperate fully.”
Now, Nvidia and Huang are facing a lawsuit in San Jose U.S. District Court by investor Mark Kistenmacher, who’s seeking to obtain class action status and bring in thousands more purchasers of the company’s stock. Kistenmacher has filed two other investor lawsuits in federal court, between 2018 and 2021, against a chip company and an electric vehicle firm, which have both been resolved.
His lawsuit against Nvidia and Huang claimed that “false and misleading” statements by Huang and the Santa Clara chip titan about the matter caused the stock price to inflate, before its value plunged as news of the scandal emerged.
Nvidia — whose value in the stock market trails only Apple’s worldwide — and Megaspeed did not immediately respond to requests for comment.
Since the New York Times broke the news in an Oct. 29 article that the purported spy had targeted Huang, Nvidia’s stock has plunged 16%, to $179 at close of trading Monday, wiping hundreds of billions of dollars off the company’s value.
Kistenmacher in his lawsuit alleged “wrongful acts and omissions” by Huang and Nvidia led to “significant losses and damages” for shareholders. He is seeking a jury trial and unspecified damages.
The lawsuit took aim at statements made by Huang and Nvidia spokesman John Rizzo, dating as far back as Oct. 9, 2025 when the New York Times published an article mentioning Huang, Ms. Huang and Megaspeed. The article raised questions about Nvidia’s tracking of its chips and the possibility U.S. export laws were being sidestepped. It also mentioned that in 2024, Huang had toasted the AI boom in a bar in Taipei, Taiwan while gathered with Asian customers of Nvidia, and that beside him was Ms. Huang, whose company Megaspeed was “poised to buy $2 billion of Nvidia A.I. technology” in the coming year.
In the article, Rizzo was quoted saying Nvidia had found no evidence Megaspeed was engaged in Nvidia chip diversion or violation of export controls.
Rizzo’s statement, the lawsuit claimed, “was materially false and misleading at the time it was made because Jensen Huang had an affair with Alice Huang, a Megaspeed executive and suspected Chinese spy, who is suspected of seeking to help smuggle NVIDIA products into China.”
Rizzo was quoted again in an article in the New York Times late last month, suggesting Huang had been targeted in a “spy plot.” Rizzo described Huang’s interactions with Ms. Huang as “not unusual or unexpected” because meeting customers is “part of a C.E.O.’s job.” That statement, too, the lawsuit alleged, was false and misleading because Huang had an affair with Huang.
Comments by Huang in an Oct. 30 Bloomberg article, including that Nvidia’s relationship with Megaspeed was proper and that Nvidia had ensured Megaspeed wasn’t illegally shipping its chips to China were also alleged in the lawsuit to be false and misleading because of Huang’s relationship with Ms. Huang.
Kistenmacher is seeking certification from the court of his lawsuit as a class action, to bring in as plaintiffs everyone who bought or otherwise acquired Nvidia stock between Oct. 9, 2025 and Nov. 8 of this year.