We are short Nvidia $NVDA. We believe Nvidia has a significant China problem

Culper Research announced a short position in Nvidia, arguing that the company’s China exposure is substantially larger than its public statements suggest. It claims that although Nvidia said China sales fell to zero after U.S. export restrictions took effect in April 2025, more than 20% of fiscal 2026 compute revenue still depended on China, supplied through illegal diversion and Southeast Asian intermediaries. The report centers on Megaspeed, described as Nvidia’s largest Southeast Asian chip buyer. Culper says financial and corporate records connect Megaspeed to Alibaba financing, and alleges that Megaspeed-linked firms routed Nvidia-equipped servers through regional companies to Chinese customers.

The report cites Megaspeed’s rapid balance-sheet growth and billions of dollars in deposits and prepayments, server imports from Nvidia partner Aivres, and shipments by other Nvidia partners to related companies. It also points to investigations, an alleged diversion operation involving Supermicro-linked individuals, and claims from employees and sources that Megaspeed’s equipment was concealed or redirected to China. Culper argues Nvidia had indicators that could have revealed diversion, including unusual customer orders and post-sale server data, and questions CEO Jensen Huang’s relationship with Megaspeed. Its investment conclusion is that Chinese government restrictions will further reduce demand, leaving Nvidia with a potential revenue shortfall exceeding $30 billion rather than the China-related upside some analysts expect.