Nvidia and its chief executive Jensen Huang are being sued by shareholders after $190 billion was wiped off the value of the company on Monday.
The lawsuit concerns the Chinese spying scandal engulfing the company, according to several media reports.
The complaint, filed in federal court in California, claims that Nvidia and Jensen Huang misled shareholders in connection with his alleged affair with Alice Huang – no relation – a former executive at Megaspeed.
Jensen Huang told Nvidia’s employees he had been unfaithful to his wife, but the parties did not disclose any details around the alleged relationship – specifically that it raised national security concerns that threatened Nvidia’s reputation and business prospects.
The legal action comes after US President Donald Trump said the FBI was investigating Jensen Huang’s affair.
Nvidia is valued at $4.3 trillion (£3.2tn) after losing more than 4% of its value in one day. The lawsuit was filed after the markets closed.
Nvidia, co-founded by Jensen Huang in 1993, once made computer chips and other hardware for videogames but is now the world’s most valuable chipmaker after capitalising on the demand for artificial intelligence.
Nvidia said on Sunday it was investigating reports that Jensen Huang was the “target of a foreign intelligence effort”.
“I know the FBI is looking into it in terms of something else, and I think that he’ll be in good shape,” Trump said at a White House briefing.
“I did speak to him today just to see if he’s feeling all right, how you’re doing. He said he had absolutely no idea that the person in question was a spy.”
In an open letter on Nvidia’s website, Jensen Huang stated: “I support the investigation and will cooperate fully. I love our country and our company. I am committed to protecting Nvidia and supporting America’s national security.”