Nvidia’s China problem was flagged six months ago by short seller Culper Research, whose warning came before the chipmaker’s shares fell 27.9 per cent from their peak of $235.74.
The May report argued that Nvidia remained substantially exposed to Chinese demand despite the company saying its China business had fallen to zero after US export restrictions were introduced in April 2025.
Culper said more than 20 per cent of Nvidia’s fiscal 2026 computing revenue was driven by Chinese demand. It alleged that restricted graphics processors were reaching Chinese customers through smuggling and South-east Asian intermediaries providing computing capacity to Chinese companies.
Culper Research’s Nvidia China allegations
The report focused on Megaspeed International, a Singapore-based company which Culper alleged had been secretly financed by Alibaba through shell companies. The arrangement, it claimed, could have enabled Chinese businesses to obtain access to Nvidia’s advanced artificial intelligence chips.
Culper also warned that reliance on such revenue left Nvidia vulnerable after Beijing blocked imports of the company’s products in favour of domestic chipmakers.
“Our review of trade records suggests substantial declines in CY Q1 2026 shipments,” the report said, adding that mainland operators had described “very few orders” in China and “a huge blow to Nvidia financially”.
Nvidia had previously defended its relationship with Megaspeed after reports that the company was being investigated over suspicions it had helped Chinese customers obtain advanced chips.
“We’ve chased down every single concern. And we’ve repeatedly tested and sampled data centers around the world and found no diversion,” Jensen Huang told Bloomberg in November 2025.
Jensen Huang and Alice Huang
Culper’s report also raised questions about Huang’s relationship with Alice Huang, a Chinese Megaspeed executive. It alleged that the pair had maintained a close relationship, but did not establish that they had a romantic connection.
The report said Huang had been seen with Alice Huang at a party in June 2024 and dining with her in Taiwan in May 2025, shortly after the US trade restrictions were announced.
Citing a Megaspeed employee, Culper said Huang visited data centres linked to the company every few months and was accompanied by Alibaba representatives. The employee described the relationship as “very close”, while a former Nvidia employee was said to have suggested that some staff had wondered whether there was a special relationship.
The source material further alleges that Huang was later ousted as Nvidia’s chief executive following a romantic affair with a suspected Chinese spy. Culper did not immediately respond to a request for comment about the return on its short position.
