A short seller flagged Nvidia CEO’s ties to a suspected Chinese spy six months before the scandal

Culper Research, a New York short seller, published a report on May 13 arguing Nvidia had a China problem. Buried in its look at Megaspeed, a Singapore-based Nvidia chip buyer, was a description of Jensen Huang's relationship with Megaspeed executive Alice Huang as unusually close. Six months later, the Nvidia CEO has admitted to an affair with her, U.S. intelligence officials believe she was recruited by Beijing, and Nvidia's board has opened a formal investigation.

That timeline matters. It means the warning signs were public, posted on X, and sitting in plain view of investors, analysts and anyone in Washington paying attention to chip diversion. The question now is not only what happened, but why a signal this specific was so easy to dismiss.

We want to be careful here, because the messenger has a motive. Culper was short Nvidia. It stood to profit if the stock fell, and its claims about chips being diverted through Southeast Asia have not been independently verified. Short reports are advocacy documents. That is exactly how they should be read.

But we'd argue the bigger lesson is that motive and accuracy are separate questions. Culper's personal-relationship observation now looks prescient. And at least one piece of its financial thesis is getting outside support: the Financial Times reported Monday that documents show Alibaba lent money to Megaspeed through subsidiaries. Culper had alleged Megaspeed was secretly financed by Alibaba through shell companies, and pointed to Megaspeed's total liabilities and equity jumping from $33 million at the end of 2023 to roughly $3 billion by the end of 2024, largely refundable deposits from an unidentified source.

That growth curve is the detail I keep coming back to. A company going from tens of millions to billions in a single year, while buying the most export-sensitive chips on the planet, is the kind of thing compliance teams exist to catch. Whether or not anything illegal happened, it should have drawn harder questions from Nvidia, from its auditors and from regulators long before a weekend apology memo.

There's an uncomfortable trajectory here if this becomes normal. The AI supply chain is now a national security supply chain, and the most aggressive public scrutiny of it came from a firm betting against the company. If short sellers end up as the de facto early-warning system for export-control leaks, that is a failure of the institutions that are supposed to do that job without a profit motive.

We're not cheering for shorts. We think Nvidia's hardware is genuinely useful and its customers mostly legitimate. But useful technology deserves a supply chain that can survive scrutiny, and this one is being tested in the worst possible way.

Megaspeed is described as a major chip buyer in Southeast Asia. U.S. intelligence officials believe Alice Huang, who shares the CEO's last name but is not related, was recruited by the Chinese government to collect intelligence on Jensen Huang and influence his position on export controls for advanced AI chips. The Culper report called the relationship "uncomfortably close" and said the CEO had been seen socializing with her on multiple occasions.