Nov 9 (Reuters) - Nvidia and Chief Executive Jensen Huang were sued on Monday in a proposed class action accusing them of defrauding shareholders by concealing Huang's ties with a suspected Chinese spy.
According to a complaint filed in federal court in San Jose, California, the defendants misled shareholders about Huang's alleged affair with Alice Huang, a former executive of Singapore-based Megaspeed who is not related to him, and did not disclose that the matter raised national security concerns that threatened Nvidia's reputation and business prospects.
The New York Times reported last month about the alleged relationship, and that US authorities had concluded Alice Huang was a Chinese intelligence asset.
Nvidia did not immediately respond to a request for comment.
Jensen Huang told Nvidia's employees he had been unfaithful to his wife, without disclosing details of the alleged relationship.
He co-founded Nvidia, and has led the Santa Clara, California-based company as it became the world's most valuable chipmaker and made him one of the world's most prominent symbols of the artificial intelligence boom.
Nvidia announced a probe into the matter on Sunday. Its shares closed down 4.3% on Monday, reducing Nvidia's market capitalization by approximately $190 billion. The lawsuit was filed five minutes after the US stock market closed.
It is common for shareholders to sue companies after unexpected share price declines. Nvidia shareholders led by Mark Kistenmacher are seeking unspecified damages from the defendants.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)