Nvidia CEO Jensen Huang and the chipmaker are facing a shareholder class-action lawsuit in the US over allegations that they misled investors by withholding information about his reported relationship with a Chinese businesswoman suspected of gathering intelligence for Beijing.

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The lawsuit, filed on Monday in a California federal court by US-based Rosen Law Firm, accuses Huang and Nvidia of failing to disclose information about the relationship and the national security concerns it allegedly raised.

The complaint claims that the omissions misled shareholders and artificially inflated Nvidia's stock price. It argues that investors suffered financial losses following a decline in the company's market value.

"As a result of Defendants' wrongful acts and omissions, and the precipitous decline in the market value of the Company's securities, Plaintiff and other Class members have suffered significant losses and damages," the lawsuit alleges.

The legal action follows reports about Huang's alleged links to Alice Huang, a Chinese executive associated with Singapore-based data centre company Megaspeed. The two are not related.

Nvidia shares tumble after board launches probe

Nvidia's shares came under pressure after the company's board announced an investigation into reports that Huang had been the target of a foreign intelligence effort.

The controversy centres on allegations that Alice Huang had links to Chinese intelligence and was involved in gathering information for Beijing. China has denied the espionage allegations.

Nvidia said an independent committee of directors, assisted by outside legal counsel, would examine the available information. The company also said it had no reason to believe that national security or company secrets had been compromised.

Huang has said he supports the investigation and would cooperate with the board.

Huang admits affair, apologises to family

The controversy also prompted Huang to address his personal life. In a message to Nvidia employees released on Sunday, the 63-year-old admitted that he had been unfaithful to his wife.

"My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry," he said.

The New York Times had earlier reported that Huang developed a close relationship with Alice Huang, who was suspected by US intelligence agencies of gathering information for Beijing. The report also said US President Donald Trump had been briefed about the matter around a year earlier.

An Nvidia spokesperson had said Huang's interactions with the woman were not unusual, describing meetings with customers as part of his role.

Nvidia at centre of US-China technology rivalry

The allegations have drawn attention because of Nvidia's position in the global semiconductor industry and the strategic importance of its products.

The company is one of the world's leading producers of processors used to train and run artificial intelligence models. Its chips are also central to the technology rivalry between the United States and China.

Washington has imposed restrictions on exports of its most advanced chips to China, seeking to prevent Beijing from gaining an advantage in artificial intelligence and other strategic technologies.

Huang, a key figure in the AI boom and an informal adviser to US President Donald Trump, has been involved in discussions around the future of American chip exports.

The shareholder lawsuit adds another layer of scrutiny for Nvidia as its board examines the allegations surrounding its chief executive.

With AFP inputs