Nvidia Stock Draws Attention As Culper Research Takes Short Position Over China Ties

• According to Culper, this exposure to China is being sustained through illegal GPU diversion networks and the use of Southeast Asian intermediaries.
• Culper further asserts that Beijing is actively cracking down on foreign chips and accelerating the adoption of domestic AI alternatives.
• Separately, Nvidia CEO Jensen Huang joined U.S. President Donald Trump on a high-profile trip to China this week.

Shares of Nvidia Corp (NVDA) rose 3% on Wednesday even after Culper Research disclosed that it is short on the stock, highlighting potential risks tied to the company’s significant business exposure to China amid U.S. export controls on advanced AI chips, geopolitical tensions, and demand dynamics in the region.

The firm’s central thesis is that, despite U.S. export controls, more than 20% of Nvidia’s projected FY2026 compute revenue remains tied to China. According to Culper, this exposure is being sustained through illegal GPU diversion networks and the use of Southeast Asian intermediaries.

“We recognize the stakes. Nvidia holds the single largest market capitalization on the planet, while CEO Jensen Huang has been celebrated as a generationally talented operator. We share the consensus view that AI – for better or worse – will continue to transform society,” Culper wrote while explicitly noting that the firm is not betting against AI.

Culper’s Other Claims

Culper’s report highlights several specific entities, including Megaspeed and Malaysia-based firms such as Speedmatrix and Novagate Cloud, some of which allegedly have ties to Alibaba-backed procurement channels. It claims that Nvidia’s Elite OEM partner Giga Computing has shipped more than $500 million worth of H200 and Blackwell servers to these intermediaries.

Culper also points to suspicious timing, such as a Malaysian subsidiary of Novagate being incorporated just days after new U.S. restrictions were announced in April 2025. The short seller contends that Nvidia has access to tools capable of detecting such diversion activities but questions whether the company has taken sufficient action to stop them.

Culper further asserts that Beijing is actively cracking down on foreign chips and accelerating the adoption of domestic AI alternatives, leading to what it describes as a structural decline in Nvidia’s China business. The report warns of a potential $30 billion-plus revenue shortfall that the market may be underestimating, contrasting with many analysts who still view China as a source of potential upside for fiscal 2027.

Separately, Nvidia CEO Jensen Huang joined U.S. President Donald Trump on a high-profile trip to China this week as a last-minute addition to the presidential delegation, as per CNBC. Huang flew to Alaska to board Air Force One and is accompanying Trump, along with other prominent CEOs, including Tesla’s Elon Musk and Apple’s Tim Cook, for a two-day summit in Beijing with Chinese President Xi Jinping. The visit, which began on May 13, 2026, focuses on trade tensions, AI technology access, and easing restrictions on U.S. chip sales to China. Nvidia reportedly described Huang’s participation as supporting “America and the administration’s goals.”

How Did NVDA Retail Traders React?

On Stocktwits, retail sentiment around NVDA stock stayed within the extremely bullish territory over the past 24 hours, while message volume stayed at high levels

A Stocktwits user expressed optimism for positive outcomes from Trump’s China visit, which will help the NVDA share price.

Yet another user, however, opined that the stock will crash on Thursday.

A third user expects NVDA shares to fall once Nvidia rival Cerebras is listed on the Nasdaq.

NVDA stock has gained over 70% over the past 12 months.

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