Nvidia and chief executive Jensen Huang face a shareholder class-action lawsuit alleging they concealed his relationship with a suspected Chinese spy — a disclosure failure investors say cost the company roughly $190bn (£145bn) in market value in a single session on Monday.

The proposed class action, filed in a federal court in San Jose, California, accuses the world's most valuable chipmaker and its founder of violating US securities laws by misleading investors. At issue: the company's failure to disclose potential national security risks linked to Huang's affair.

Shares in Nvidia closed 4.3 per cent lower at $178.67 on Monday, after falling almost nine per cent earlier in the session. The sell-off extends a slide that has weighed on the stock since the scandal broke.

Who is suing, and on what grounds?

Shareholder Mark Kistenmacher filed the complaint, represented by the Rosen Law Firm. The suit covers investors who bought Nvidia shares between 9 October 2025 and 8 November 2026, and seeks unspecified damages.

The plaintiffs argue Nvidia's previous statements about its dealings with Singapore-based data centre company Megaspeed were misleading because they failed to disclose Huang's relationship with former executive Alice Huang. US intelligence officials reportedly identified Alice Huang as a Chinese intelligence asset. China has rejected the espionage allegations.

The legal theory is straightforward: information that could damage Nvidia's reputation and business prospects was material, and withholding it from investors breached US securities law. The $190bn market value erased on Monday is the damages narrative at the heart of the case.

What has Huang admitted?

The lawsuit follows Huang's admission on Sunday that he had been unfaithful to his wife, after previously describing his dealings with Alice Huang as professional.

"My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry," Huang told employees in a message that reframed his account of the relationship days before the filing.

Nvidia's board has launched an independent investigation into whether its chief executive had been targeted by a foreign intelligence operation. The chipmaker said it "had no reason to believe" confidential information or national security had been compromised, and the board reiterated its confidence in Huang.

What does the FBI involvement mean?

The civil action lands alongside a federal criminal dimension. Donald Trump confirmed on Monday that the FBI is investigating the scandal.

"I know the FBI is looking into it," the US president told reporters. Trump defended Huang, saying he believed the executive had no knowledge of the woman's alleged spy connections.

The parallel tracks — a shareholder suit in San Jose, an FBI probe, and a board-run internal investigation — leave Nvidia answering to three sets of questioners at once, each with a different standard of proof.

How exposed is Nvidia?

The class period spans more than a year of purchases, meaning every investor who bought Nvidia stock from 9 October 2025 through 8 November 2026 is a potential claimant. Damages are unspecified, but the suit's foundation is the gap between what Nvidia said about its dealings with Megaspeed and what it did not say about Huang's personal relationship with Alice Huang.

For a company whose valuation depends on the credibility of its leadership at the centre of the AI build-out, the claim that reputationally damaging information was withheld cuts at more than legal compliance. The board's public backing of Huang, delivered alongside its investigation, signals the company intends to fight rather than distance itself.

A near-nine per cent intraday drop, a 4.3 per cent close, and a $190bn market value erased — Monday's numbers are now the plaintiff's exhibit A.