US President Donald Trump has said the FBI is investigating Nvidia CEO Jensen Huang's alleged relationship with a Chinese businesswoman suspected of spying for Beijing, as the chipmaker faces a shareholder lawsuit accusing it of concealing the relationship and its potential national security implications.

Trump said he had spoken to Huang on Monday and was "amazed" by the allegations. According to the president, Huang told him that he had no idea the woman was a spy.

"I asked him that question: 'Did you have any idea that she was a spy?' He said, 'I had no idea that she was a spy,' and I really believe him," Trump told reporters at a White House briefing.
"I know the FBI is looking into it. I think that he'll be in good shape," he added.

Meanwhile, Nvidia and Huang were sued in a proposed class action filed in a federal court in San Jose, California, on Monday. The lawsuit accuses them of misleading shareholders by concealing Huang's alleged relationship with Alice Huang, a former executive of Singapore-based company Megaspeed who is not related to him.

The complaint alleges that the defendants failed to disclose the national security concerns arising from the relationship, which could threaten Nvidia's reputation and business prospects. The shareholders, led by Mark Kistenmacher, are seeking unspecified damages.

The lawsuit followed a report by The New York Times last month that Huang had a relationship with Alice Huang, whom US authorities had investigated and concluded was a Chinese intelligence asset. The newspaper also reported that Trump had been briefed on the matter but chose not to act on the information.

Nvidia's board announced an internal investigation into whether Huang had been targeted by a foreign intelligence operation. The company has expressed confidence in its chief executive, who told employees that he had been unfaithful to his wife but did not disclose details of the relationship.

Nvidia shares fell 4.3 per cent on Monday, hitting a seven-month low and wiping out approximately $190 billion from the company's market capitalisation. The lawsuit was filed five minutes after the US stock market closed.

Political and business fallout
The controversy has also raised questions about US technology policy towards China. Lawmakers and advocates told Reuters that the revelations could strengthen efforts in Congress to tighten restrictions on China's access to advanced artificial intelligence chips.

US House Democratic leader Hakeem Jeffries said Congress needed more answers and called for the passage of an annual defence bill that includes restrictions on chip sales to China.

Chinese Foreign Ministry spokesperson Guo Jiakun dismissed the allegations against Alice Huang as baseless.
"The so-called Chinese spy narrative is purely a groundless accusation, slander, and a smear," he told reporters in Beijing.

Huang, 63, is one of Trump's closest allies in Silicon Valley, with their relationship dating back to at least 2025. He has repeatedly supported the administration's agenda and made frequent visits to Washington as Nvidia sought approval to sell advanced chips to China.

Trump has publicly praised Huang and awarded him the nation's highest honour for scientific achievement in October. On the same day, Trump disclosed that he had bought up to $1.6 million and sold up to $1 million worth of Nvidia shares during the summer.

Huang is Nvidia's fifth-largest shareholder, holding an approximately 3.6 per cent stake, according to LSEG data. He also maintains considerable control over the company's operations through an unusually flat management structure, with dozens of executives reporting directly to him.

Analysts, however, do not expect the investigation to force the longtime CEO to step down, although it has renewed questions about succession at the world's most valuable chipmaker.
"Nvidia is not an ordinary company and Jensen is not an ordinary CEO; he is Nvidia, clearly sets the long-term strategy and direction, and pulls most of the company's strings himself," Bernstein analyst Stacy Rasgon said.

(With Reuters inputs)