Six months ago, Nvidia stock peaked at $235.74 a share. But while others were focused on the AI boom and Nvidia’s growing market cap, one research firm saw a China-sized crack in the foundation.
Now, Nvidia is down 27.9% since then, and Jensen Huang has been ousted as CEO following his romantic affair with a suspected Chinese spy.
In a report in May, short seller Culper Research raised concerns about Nvidia’s exposure to China—including Huang’s relationship with the suspected spy, Alice Huang.
“This is not a bet against AI. We are short Nvidia for one reason: the Company has a significant China problem,” the report read.
Culper Research did not immediately respond to a request for comment from Fortune regarding the return on its short bet.
The China problem
The central allegation in Culper’s report was that more than 20% of Nvidia’s fiscal 2026 compute revenue was driven by Chinese demand, despite assertions from the company that its China business had fallen to zero following U.S. export restrictions in April 2025.
Culper alleged the revenue came through the smuggling of restricted GPUs to Chinese customers and via Southeast Asian intermediaries that purchased Nvidia hardware and provided computing capacity to Chinese companies.
The research’s allegations focused on Singapore-based Megaspeed International, which it says was secretly financed by China’s Alibaba through a network of shell companies—potentially allowing Chinese companies to access Nvidia’s advanced AI chips.
The problem in relying on this undisclosed China-based revenue was that Beijing has since blocked Nvidia imports in favor of its own domestic chipmakers, according to Culper.
“Our review of trade records suggests substantial declines in CY Q1 2026 shipments,” the report continued, “while mainland operators tell us that there are now ‘very few orders’ in China, presenting ‘a huge blow to Nvidia financially.’”
Nvidia previously defended its relationship with Megaspeed after the New York Times reported in October 2025 that it was under investigation over suspicions that it had helped Chinese customers obtain advanced Nvidia chips.
“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.
Jensen Huang’s affair
But one of the most consequential parts of Culper’s report also involved Alice Huang, the Chinese Megaspeed executive who had reportedly engaged in a close relationship with Jensen Huang—the first domino to topple his CEO tenure.
Culper raised questions about her continued influence over Nvidia and her relationship but did not establish any romantic ties.
“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 stated. “He was first spotted partying with Alice Huang in June 2024–the same month the Apex/Alibaba pledge was filed. He then dined with Alice Huang in Taiwan in May 2025–just weeks after the news of U.S. trade restrictions.”
Citing a Megaspeed employee, the report added that Jensen Huang visited Megaspeed-linked data centers “every few months” and was always accompanied by representatives from Alibaba. “The Megaspeed employee characterized their relationship with Jensen as ‘very close’, corroborating another former Nvidia employee’s suggestion to us that many Nvidia employees wondered if there was a special relationship.”