‘Nvidia has a significant China problem’: Did this hedge fund foresee the Jensen, Alice Huang controversy 6 months ago?

Nvidia was riding a fresh stock market high when New York-based short-selling firm Culper Research raised concerns about the chipmaker's business in China and its chief executive Jensen Huang's close ties with Megaspeed's former international executive Alice Huang, a Chinese national.

In a report published on May 13, the firm said it was taking a short position in Nvidia, despite sharing the consensus view that artificial intelligence would continue to transform society. “This is not a bet against AI. We are short Nvidia for one reason: the company has a significant China problem,” it said.

Six months later, the hedge fund's previous warning has come back into focus as Nvidia's board investigates Huang following his admission of an affair with Alice Huang, who has been identified as a suspected Chinese spy.

Quick answers to key questions

•5 QUESTIONS

1

What did Culper Research warn about Nvidia's China business?⌵

In a May 13 report, Culper said Nvidia had a “significant China problem” and questioned whether its China-related business had truly fallen to zero after US trade restrictions.

2

Did Culper Research predict the Jensen Huang and Alice Huang controversy?⌵

Culper raised concerns about Jensen Huang's close ties to Megaspeed and its former executive Alice Huang about six months before the controversy drew renewed attention. Its report focused mainly on Nvidia's China exposure and alleged chip diversion.

3

How much of Nvidia's compute revenue did Culper say was still linked to China?⌵

Culper estimated that more than 20% of Nvidia's fiscal 2026 compute revenue remained driven by China, allegedly through illegal GPU diversion and Southeast Asian intermediaries. This was the short seller's estimate, not an established finding.

4

What did Culper Research allege about Megaspeed and Nvidia chips?⌵

Culper alleged that Megaspeed was secretly financed by Alibaba through shell companies and questioned whether Nvidia chips could be diverted to China through intermediaries. Megaspeed denied illegal transfers and said inspections found no evidence of violations.

5

How did the China-related controversy affect Nvidia shares?⌵

Nvidia shares fell nearly 6% in pre-market trading to $176 amid renewed scrutiny of the company's China exposure and the controversy involving Jensen Huang. The articles also reported that the stock had declined about 22% from its peak.

Over the weekend, CEO Huang reportedly admitted in an internal staff memo that he had been unfaithful to his wife and apologised to employees. China, meanwhile, swiftly rejected allegations of its involvement in the controversy.

In its 40-page report, Culper Reseach alleged that Huang had maintained an unusually close association with Megaspeed and its international executive Alice Huang, also known as Huang Le.

“Nvidia CEO Jensen Huang has not only vouched for Megaspeed, but seems to have quite literally walked alongside Megaspeed at every step, while maintaining an uncomfortably close relationship with Megaspeed’s Alice Huang, a Chinese national,” the report read.

Culper questioned Nvidia's claims that its business in China went to “zero” after US imposed trade restrictions in April 2025. It estimated that over 20% of the chipmaker's FY26 compute revenues remained driven by China, allegedly through illegal GPU diversion and Southeast Asian intermediaries.

A key focus of Culper's report was Megaspeed, which Nvidia had repeatedly vouched for as a Singapore-headquartered company with no Chinese shareholders. The short seller alleged, however, that the company was secretly financed by Chinese e-commerce giant Alibaba through a network of shell companies. It argued that Nvidia's assertion about Megaspeed having no Chinese equity did not rule out Chinese financing.

Megaspeed was established in 2023 after Chinese gaming and cloud computing company 7Road separated its overseas operations and renamed the business. Headquartered in Singapore, it became one of Nvidia's single largest customers in Southeast Asia, the report stated.

The Huang controversy have raised questions about corporate governance, possible espionage risks and Nvidia's exposure to China, sending ripples across the technology industry and also putting pressure on its stock.

Shares of US-based technology giant witnessed renewed selling pressure in Monday's trade, falling nearly 6% in pre-market trading to $176 apiece.

The shares had already faced significant volatility last week as concerns mounted over Big Tech's spending on AI infrastructure following the Democrats' sweeping victory in the US midterm elections. And the latest controversy has added another layer of uncertainty to the stock.

The development comes just days before the company is scheduled to report its quarterly earnings on November 17, 2026.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.

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