Short seller Culper flagged Nvidia's China exposure months before Huang's exit
Nvidia shares have fallen 27.9% from a peak of $235.74 after short seller Culper Research published a report in May alleging the chipmaker has a "significant China problem" — a bet that preceded Jensen Huang's removal as chief executive.
Culper alleged that more than 20% of Nvidia's fiscal 2026 compute revenue was driven by Chinese demand, despite the company's assertions that its China business had fallen to zero after US export restrictions in April 2025. The report said the revenue reached Chinese customers through smuggled restricted GPUs and Southeast Asian intermediaries that bought Nvidia hardware and supplied computing capacity to Chinese firms. "This is not a bet against AI. We are short Nvidia for one reason: the Company has a significant China problem," Culper wrote.
The research centred on Singapore-based Megaspeed International, which Culper said was secretly financed by China's Alibaba through a network of shell companies. Culper also questioned Jensen Huang's ties to Megaspeed executive Alice Huang, a Chinese national, saying he was seen with her in June 2024 and dined with her in Taiwan in May 2025. The report cited a Megaspeed employee who described the relationship as "very close" and said Huang visited Megaspeed-linked data centres "every few months", always accompanied by Alibaba representatives. Culper did not establish any romantic ties.
Nvidia has previously defended its Megaspeed relationship. "We've chased down every single concern. And we've repeatedly tested and sampled data centers around the world and found no diversion," Huang told Bloomberg in November 2025. Culper said its review of trade records suggested substantial declines in shipments in the first quarter of 2026, with mainland operators reporting "very few orders" in China after Beijing blocked Nvidia imports in favour of domestic chipmakers.
What it means for Pakistan: Pakistan does not sit at the centre of the US-China chip dispute, but the case carries a clear lesson for its regulators and investors: export controls and allegations of diversion through intermediary jurisdictions can reprice a global technology leader within months. For Pakistani funds and savers with exposure to US tech stocks, the 27.9% slide from Nvidia's peak shows how quickly geopolitical and compliance risk can hit returns. It also reinforces why PVARA and the State Bank are building licensing and AML checks for virtual asset and fintech firms — the same scrutiny over shell companies and undisclosed ownership that Culper alleges here is the kind of risk Pakistani regulators say they want to catch early.
