Nvidia CEO Jensen Huang and the chipmaker are facing a class-action lawsuit over allegations that they misled shareholders about his reported relationship with a Chinese executive accused of spying for Beijing.

US-based Rosen Law Firm announced that it had filed the lawsuit, accusing Huang and Nvidia of withholding information about his links to the woman, who allegedly funnelled information to China.

The New York Times reported last month that Huang, who was born in Taiwan, had developed a close relationship with Alice Huang, a Chinese executive associated with Singapore-based data centre company Megaspeed. She is not related to the 63-year-old Nvidia CEO.

The controversy intensified after Nvidia's board launched an inquiry into reports that Huang had been "the target of a foreign intelligence effort." China has denied the allegations. Nvidia's shares also fell following the reports.

The United States has imposed restrictions on exports of its most advanced semiconductor chips to China as both countries compete for technological dominance. Nvidia, a global leader in manufacturing chips used to train and operate artificial intelligence models, remains one of the world's most valuable companies.

Filed in a California federal court on Monday, the lawsuit alleges that Huang and Nvidia misled investors about the national security concerns surrounding the reported relationship. It further claims that their statements "artificially inflated" Nvidia's share price.

The lawsuit states, "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."

Huang also addressed the controversy in a message to Nvidia employees released on Sunday. He admitted that he had been "unfaithful" to his wife and apologised for his actions.

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

Huang is a prominent figure in the global artificial intelligence boom and also serves as an informal adviser to US President Donald Trump. Trump has repeatedly opposed regulations on the AI industry, arguing such measures could help China gain a technological advantage.