Nvidia CEO Jensen Huang is facing the biggest personal and potentially national-security crisis of his career after admitting to marital infidelity amid allegations that Alice Huang, a businesswoman linked to one of Nvidia's largest Southeast Asian customers, was recruited by Chinese intelligence.
But there's something almost nobody seems to have noticed: short seller Culper Research was raising red flags about Jensen Huang's relationship with Alice Huang back in May and alleged Nvidia had a "significant China problem".
On May 13, Culper disclosed a short position in Nvidia, warning that the chipmaker had a significant China problem. The firm specifically highlighted Jensen's unusually close relationship with Alice Huang, an executive at Megaspeed, a major Nvidia customer under scrutiny over potential chip diversion.
Culper documented their appearances together in June 2024 and May 2025, and cited employees who described Megaspeed's relationship with Jensen as unusually close.
Now that Huang has acknowledged infidelity, those earlier observations have taken on new significance. His admission does not, however, establish the report's broader allegations. But those broader allegations are now worth revisiting...
Among Culper's findings:
- More than 20% of Nvidia's FY2026 compute revenue was allegedly driven by China. Culper argued that despite Nvidia's claims that its China compute business had effectively disappeared following U.S. export restrictions, Chinese demand continued flowing through Southeast Asian intermediaries and alleged illegal GPU diversion.
- Megaspeed was allegedly financed by Alibaba. Culper identified $2.9 billion in unexplained refundable deposits on Megaspeed's balance sheet and traced a collateral arrangement involving its Malaysian subsidiary to an Alibaba-owned Singapore entity. That entity reported approximately $4.2 billion in related-party loans.
- Billions in Nvidia-powered servers allegedly flowed through questionable channels. Culper cited trade records showing $4.6 billion in imports by Megaspeed subsidiary Speedmatrix, including approximately $4 billion originating from Nvidia partner Aivres Systems. The firm also alleged additional networks involving Supermicro, OBON, YTL AI Cloud and Novagate.
- Nvidia allegedly had the tools to detect diversion. Former employees and industry sources told Culper that Nvidia could identify warning signs through customer due diligence, purchasing patterns and technical indicators showing where servers were operating. Culper questioned how Nvidia could repeatedly claim to have found no evidence of diversion.
- Nvidia's geographic revenue disclosures allegedly obscured its true China exposure. Culper argued that reporting sales based on customer headquarters rather than ultimate end users made it difficult for investors to assess how much Nvidia revenue was economically dependent on China.
But perhaps the most important allegation was financial.
Culper warned that Wall Street was treating China as potential upside for Nvidia when it could actually represent substantial downside.
The firm's thesis was that Nvidia had never truly lost its Chinese business. Instead, that demand had continued through intermediaries. With Beijing increasingly restricting foreign AI chips and promoting domestic alternatives, Culper believed Nvidia was only then beginning to lose revenue it had previously continued to capture.
The report cited Wells Fargo's estimate that China could represent more than $25 billion in annual incremental revenue opportunity, while arguing that investors were overlooking the risk of existing China-linked demand disappearing.
Culper warned of a potentially massive shortfall in Nvidia's forward revenue estimates, with implications for earnings growth and valuation.
These remain Culper's allegations, not established findings. The firm stood to benefit financially from a decline in Nvidia shares, and Huang's admission does not prove that Nvidia knowingly facilitated chip diversion, concealed Chinese revenue exposure or violated export controls.
Still, the timing is remarkable.
Six months before the current scandal, Culper was publicly questioning Jensen Huang's relationship with Alice Huang, Megaspeed's financing, Nvidia's knowledge of its customers and the sustainability of its China-linked business.
Now, with Nvidia's board investigating the circumstances surrounding Huang's relationship and the alleged foreign intelligence connection, the report deserves renewed scrutiny.
"...analysts treat China as potential upside to FY 27 numbers. We think the opposite - as Beijing cracks down, NVDA is now actually losing the business it claimed it lost a year ago. Mainland operators tell us "very few orders", "a huge blow." We see a $30B+ air gap ahead," Culper wrote back in May.
The affair may be what brought attention back to Culper's May warning. But the potentially bigger story is what the short seller alleged about Nvidia's business—and what those allegations, if substantiated, could mean for its shareholders.
And suddenly, everyone should be rushing to read the rest of Culper's 40-page report.