Nvidia shares tumble 8% as CEO Jensen Huang faces lawsuit and scrutiny

Nvidia's shares dropped sharply on Monday, falling more than 8% at the opening bell before closing about 4% lower at $178.67. The decline erased roughly $192 billion from the chipmaker's market value in a single session, even as the broader market rose, with the S&P 500 up 2.35% and the Nasdaq gaining 2.7%.

The sell-off coincided with a lawsuit filed against Nvidia and its chief executive, Jensen Huang. The proposed class-action accuses the company of defrauding shareholders by allegedly hiding Huang's connections to Alice Huang, a Chinese businesswoman suspected of espionage for Beijing. Reports also said Huang disclosed to employees that he had been unfaithful to his wife, though details were not provided.

Analysts noted that the controversy adds uncertainty to Nvidia, which has already faced questions about the rising costs of data-center infrastructure needed to support global AI expansion. The company’s leadership is also under investigation for possible national-security implications tied to the CEO's personal associations.

Huang, 63, is widely regarded as a key figure in the AI sector, with Nvidia's GPUs powering major models such as ChatGPT. Under his direction, Nvidia has invested heavily across the AI ecosystem, including cloud-computing providers and AI research labs. His influence on markets has been evident in past instances, such as a casual dinner in Seoul that lifted South Korean food stocks and his endorsement of Marvell Technology, which helped the firm reach record highs.

Despite the day's losses, Nvidia remained valued at about $4.3 trillion, having previously become the first company to surpass $4 trillion and later $5 trillion in market capitalization. The recent volatility underscores how developments involving the company and its chief executive can affect not only shareholders but the broader AI industry.