On 13 May, Culper Research published a 40-page report arguing that Nvidia had “a significant China problem”, and disclosed that it was short the stock. Investors largely ignored the warning for the next five months. Nvidia closed 2.3% higher that day at $225.83, gained another 4.4% to $235.74 the next session, and went on to close at a high of $239.24 on 6 October. By Thursday’s close of $166.19, the shares were 26% below their level on the day of the report and more than 30% below that October peak.
The six months in between have turned parts of Culper’s case from short-seller allegations into mainstream reporting. Alice Huang, the former Megaspeed executive whom the report described as “uncomfortably close” to Jensen Huang, is now at the centre of the scandal that ended his 33-year run as Nvidia’s chief executive. Megaspeed, which Culper called Nvidia’s largest buyer in Southeast Asia, is under investigation in Singapore and has hired a US law firm to count its GPUs. None of that proves Culper’s core financial argument, which concerns how much of Nvidia’s revenue still depends on Chinese demand.
Culper’s case was about revenue quality, not Huang’s private life
The report’s central claim is that Nvidia’s China business never really went to zero. Huang said in October 2025 that Nvidia had gone from a 95% share of China’s market to nothing, and that the company was “100% out of China”. Culper estimated that more than 20% of Nvidia’s fiscal 2026 compute revenue was still driven by Chinese demand, through illegal diversion and Southeast Asian intermediaries. Nvidia has not publicly addressed that estimate, and no regulator has published a figure of its own.
The mechanics matter because of how Nvidia reports its sales. Its filings assign revenue to the customer’s billing location, and Nvidia has said that “end customer and shipping location may be different” from that location. According to the Wall Street Journal’s Jonathan Weil, Nvidia stopped breaking out Singapore revenue after the quarter that ended in July 2025, when the country accounted for 22% of the total. Nvidia has said shipments into Singapore itself were insignificant, but its filings do not say where the rest of that hardware went.
Culper then followed the money through Megaspeed’s accounts. It said the company’s balance sheet grew from about $33 million at the end of 2023 to $3.0 billion a year later, mostly through $2.9 billion of “refundable deposits” from an unnamed source. The report alleged that documents pointed to Alibaba as the financier, through a Singapore company called Apex Enterprise Solutions. It also said Megaspeed’s Malaysian unit, Speedmatrix, imported $4.6 billion of products between December 2024 and January 2026. About $4 billion of that came from Aivres, an Nvidia server partner that took over the US business of China’s Inspur.
Nvidia and Megaspeed both reject the diversion claims made in the report. Nvidia said in October that the allegations against Megaspeed had been “thoroughly investigated and debunked last year”, and that Huang’s interactions with Alice Huang were “not unusual or unexpected”. Megaspeed says reviews by the US Commerce Department, Malaysian authorities and Nvidia found no evidence of violations, and it has threatened legal action over a Bloomberg report that it rented computing power to Alibaba. No charges have been reported against Nvidia, Megaspeed or Alice Huang.
Regulators have since moved on the Southeast Asian channels Culper described
The first official move came less than three weeks after the report. On 31 May, the Commerce Department’s Bureau of Industry and Security said it would enforce licence requirements on advanced chips sold to companies headquartered in China, even when those companies operate abroad, Reuters reported. That closed a gap that may have let Malaysian and other overseas units of Chinese firms buy Blackwell chips without a licence. An Nvidia official told Reuters that the change made no difference to the company, because it already needed a licence for such sales.
The Supermicro case shows what diversion looks like when prosecutors find it. In March, the Justice Department charged a Supermicro co-founder and two others with conspiring to divert AI servers to China through an unnamed Southeast Asian buyer. Prosecutors allege that the buyer purchased about $2.5 billion of servers in 2024 and 2025. At least $510 million of them went to China within a few weeks in 2025, they say, hidden behind dummy machines staged for audits. Nvidia was not accused, and Supermicro says the conduct broke its own policies, but Culper argued that the case reflected one corridor of a much wider network.
The revelations about Huang himself followed from late October. Reports said US intelligence had concluded that Alice Huang was gathering information for China’s Ministry of State Security, which Beijing has called a smear. Nvidia’s board opened an investigation on 8 November, and Huang resigned four days later. On the same day, Singapore said it had barred Alice Huang from re-entry after she gave police inaccurate information about her role at Megaspeed.
The share price has tracked those headlines, although not only them. Nvidia fell 9.3% on 5 November, the day three House committee chairs asked Huang to brief Congress, during a wider sell-off in AI chip stocks. It lost 4.3% on 9 November, the first trading day after the board’s statement, and another 4.3% on 12 November, when Huang resigned. In Washington, OpenAI has meanwhile backed a package of tighter chip export rules that Nvidia opposes.
Nvidia’s 17 November results are the first real test of the short thesis
Christian Lamarco, Culper’s 31-year-old founder, told MarketWatch this week that the firm had found similar red flags at no fewer than six other Southeast Asian companies, which he did not name. “We were confident in the research initially, and we’re still confident in it now,” he said. He declined to say whether Culper is still short, or how much it has made from the trade. That matters, because a short seller profits when the shares fall, and the firm’s revenue estimates have not been independently verified.
Wall Street has not come round to Culper’s view. Analysts still rate Nvidia a strong buy on average, with a mean price target of about $303, according to TipRanks data, more than 80% above Thursday’s close. That optimism rests mainly on spending by US cloud providers and AI labs rather than on China. Culper argues that the risk sits in the other direction, saying analysts treat China as upside to fiscal 2027 forecasts when it sees a revenue “air gap” of more than $30 billion.
The quarterly report will be the first chance to test those claims against Nvidia’s own numbers since Huang’s exit. Investors will look for any change in how the company discloses revenue by region, for comments on sales through Southeast Asian partners, and for an update on the board’s review. Interim chief executive Colette Kress, who remains chief financial officer, will face those questions directly. Nvidia reports its third-quarter results after the US market closes on 17 November, with the earnings call at 2pm Pacific time.
