Short activist Culper Research said Wednesday it has opened a short position in Nvidia Corp, arguing that the semiconductor company still derives a sizeable share of its fiscal 2026 compute revenues from China despite public statements that its China business dropped to "zero" after U.S. export restrictions took effect in April 2025.
Culper contends that shipments to China have continued through illegal diversion and the use of Southeast Asian intermediaries. The firm singled out Megaspeed as Nvidia’s largest buyer in Southeast Asia and said that entity is under investigation by U.S. Commerce and Singaporean authorities.
According to Culper, documents indicate Megaspeed has been covertly financed by Alibaba using shell companies. The short seller highlights a dramatic expansion in Megaspeed’s reported balance sheet - from $33 million at year-end 2023 to $3.0 billion at year-end 2024 - and attributes that growth to $2.9 billion in refundable deposits from an unnamed source.
Culper refers to Malaysian corporate filings showing that in June 2024 Speedmatrix, a Megaspeed subsidiary, granted its entire business as collateral to Apex Enterprise Solutions, a Singapore entity whose corporate parent the short seller says is Alibaba. Culper notes that as of March 31, 2025, Apex disclosed more than $4.1 billion in prepayments offsetting $4.2 billion in loans payable to Alibaba.
Trade records cited by Culper show Speedmatrix imported $4.6 billion in product from December 2024 through January 2026, and that $4.0 billion of that inbound volume originated from Aivres Systems Inc. Culper identifies Aivres as an Nvidia Elite OEM compute partner that assembles servers equipped with Nvidia components. The short seller also states Aivres was formerly known as Inspur Systems Inc. and remains one-third owned by the Chinese state.
The report includes an allegation of close ties between Nvidia and Megaspeed personnel. Culper says Nvidia CEO Jensen Huang has maintained a close relationship with Megaspeed’s Alice Huang, a Chinese national, and relays that a current Megaspeed employee told Culper Jensen visits data centers linked to Megaspeed every few months, usually accompanied by Alibaba representatives.
Culper additionally referenced a March 2026 Department of Justice indictment that charged three individuals tied to Supermicro Computer with allegedly smuggling $2.5 billion of Nvidia-powered servers into China via a Southeast Asian entity.
The short seller told investors it believes Nvidia’s true China business is now falling as Beijing’s late 2025 and early 2026 policies have curtailed Nvidia imports in favor of domestic alternatives. Culper’s review of trade data, it says, points to material declines in shipments in the first quarter of 2026.
On the basis of this compilation of documents, trade records and legal filings, Culper Research said it has positioned itself short Nvidia and expects the company’s shares to move lower.
Key takeaways
- Culper Research alleges Nvidia still earns over 20% of fiscal 2026 compute revenue from China despite company statements that China business went to "zero" after April 2025 restrictions.
- Megaspeed is identified as a central intermediary; its balance sheet growth and financing are highlighted as evidence of concealed China-facing activity involving Alibaba-linked entities.
- Related legal and trade developments, including a March 2026 DOJ indictment and reported Chinese import restrictions in late 2025 and early 2026, are cited as changing the pattern of shipments.
Risks and uncertainties
- Investigations and allegations: Megaspeed is described as being under probe by U.S. Commerce and Singapore authorities, which could lead to additional enforcement outcomes.
- Trade flow volatility: Culper’s review suggests first-quarter 2026 shipments declined materially, but the extent and persistence of such declines remain subject to trade data and policy enforcement.
- Legal exposure and market reaction: The DOJ indictment referenced and potential enforcement actions could affect companies across the semiconductor supply chain.