Nvidia (NVDA) is facing a fresh wave of scrutiny. Culper Research published a short report Wednesday alleging the semiconductor giant has a significant and undisclosed "China problem" — one that goes far beyond what the company has told investors.
The report claims that while Nvidia has publicly stated its China compute business dropped to zero following April 2025 trade restrictions, more than 20% of its FY 2026 compute revenues were actually driven by Chinese demand through illegal diversion and Southeast Asian intermediaries. In other words, the business didn't disappear — it just went underground.
MarketDash has reached out to Nvidia for comment on the Culper report.
Megaspeed International Linked to Secret Alibaba Financing
The research zeros in on Singapore-based Megaspeed International, which it identifies as Nvidia's largest Southeast Asian buyer. According to Culper, Megaspeed is secretly financed by Alibaba Group (BABA) via a series of shell companies. The numbers are eye-popping: Megaspeed's balance sheet exploded from just $33 million to $3 billion in a single year, a move fueled almost entirely by $2.9 billion in "refundable deposits" from unnamed sources.
The report further alleges that CEO Jensen Huang maintains an "uncomfortably close" relationship with Megaspeed's leadership and is frequently accompanied by Alibaba representatives during his visits to data centers. If true, that would suggest a much deeper connection to China than Nvidia has acknowledged.
DOJ Indictments and Diversion Risks Threaten Forward Revenue
Culper also connects these operations to the March 2026 DOJ indictment involving Super Micro Computer (SMCI) and OBON Corp, characterizing Megaspeed as the "tip of the iceberg" in a complex server-smuggling network. The firm also identifies partner Aivres Systems, formerly the blacklisted Inspur Systems, as a de facto China-dedicated supply channel.
The implications for Nvidia's future are serious. Culper warns that as Beijing pivots toward domestic alternatives and clamps down on foreign chips, Nvidia faces a massive "air gap" in its forward revenue estimates. If the diversion channels get shut down, that revenue — which the market may be implicitly counting on — could vanish.
NVDA Shares Edge Higher Wednesday Afternoon
Despite the negative report, Nvidia shares were up 2.66% at $226.65 at the time of publication on Wednesday, trading at a new 52-week high. The market, it seems, is either skeptical of Culper's claims or more focused on other factors. But with a short report this detailed, the story is unlikely to fade quietly.
