Months before Nvidia’s (NVDA) CEO Jensen Huang’s confessed affair and the board’s investigation into the matter hit the headlines, concerns about the world’s top AI chipmaker’s exposure to China had already surfaced.
Last May, activist short seller Culper Research said it had initiated a short position in Nvidia, highlighting what it called “the China problem.” At the time, shares of the AI chip giant were trading near record highs. Culper emphasized that his thesis was not a bet against enterprise AI adoption, but rather a warning that the market was significantly undervaluing Nvidia’s exposure to mainland China.
The short seller alleged that even though Nvidia claimed its China sales had fallen to zero, more than 20% of the company’s fiscal 2026 IT and data center revenues remained tied to China via third-party diversion in Southeast Asia.
The report specifically flagged Megaspeed, a Singapore-based cloud computing provider and major Nvidia customer, which the short seller said had underlying financial ties to Chinese tech giant Alibaba. Researchers also reported Huang’s relationship with Alice Huang, director of Megaspeed.
“Nvidia CEO Jensen Huang not only vouched for Megaspeed, but appears to have literally walked alongside Megaspeed every step of the way, while maintaining an uncomfortably close relationship with Megaspeed’s Alice Huang, a Chinese national,” the May report said.
Highlighting the rapid expansion of Megaspeed’s balance sheet, the short seller questioned whether Nvidia was being diligent enough about where its advanced chips ultimately end up. Megaspeed has denied participating in illegal hardware transfers, and Nvidia has claimed its compliance audits found no evidence of export violations.
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