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Culper Research called it early. The short seller bet against Nvidia after suspecting the chipmaker was quietly funneling AI chip sales into China through neighboring countries — and so far, the bet looks right.
Jensen Huang told investors in November 2025 that Nvidia’s China sales would be zero for the foreseeable future, pointing to U.S. export control measures as the reason. That was pretty much the official line. But Culper wasn’t buying it. By May 13, the firm had built a short position in Nvidia’s stock, convinced that Chinese demand for AI chips wasn’t disappearing — it was just taking a detour through Taiwan, Malaysia, and Singapore. The key claim: more than 20% of Nvidia’s fiscal 2026 compute revenue was indirectly driven by Chinese demand, allegedly routed through Southeast Asian intermediaries to sidestep export restrictions. That’s not a rounding error. That’s a structural problem, if true.
The Intermediary Network Culper Named
Culper’s report got specific. It named Singapore’s Megaspeed, Malaysia’s Speedmatrix, and Giga Computing — a subsidiary of Taiwan’s Gigabyte — as key players in what it described as a broader network sustaining Chinese AI chip demand through regional middlemen. These weren’t random picks. The firm framed them as part of a coordinated arrangement involving multiple OEMs and partners, all essentially keeping Chinese buyers supplied despite the official restrictions.
And then there’s the quote that probably made Nvidia’s legal team nervous. A former high-level Nvidia employee — no name given in the report — told Culper that Megaspeed was “the tip of the iceberg.” That’s a pretty loaded phrase. It points to something bigger, messier, and harder to contain than a few rogue distributors operating independently. Unclear exactly how Culper verified the claim, but they put it in the report.
Nvidia pushed back. The company said it had conducted global data center tests to check compliance and wasn’t bypassing export regulations. Huang himself maintained that Nvidia wasn’t doing anything improper. But denials don’t stop investigations.
Taiwan Raids an Nvidia Employee’s Home
July brought the first hard legal action. Taiwanese prosecutors searched both the home and workplace of an Nvidia employee accused of smuggling restricted chips to China. That’s the first known legal move in Taiwan’s expanding investigation into AI chip smuggling — and it landed on the same day Huang met with U.S. Commerce Secretary Howard Lutnick. Probably a coincidence. Maybe not.
The timing made people pay attention. A CEO-level meeting with a senior U.S. trade official on the exact day domestic prosecutors are raiding one of your employees’ homes is the kind of thing that ends up in a congressional hearing. No word yet on whether the Lutnick meeting touched on the Taiwan investigation specifically.
The raids put Nvidia’s regional operations under a spotlight that’s hard to dim. Taiwanese authorities don’t conduct residential searches lightly — that kind of escalation usually means prosecutors think they have something. Whether that something connects back to Nvidia’s corporate decisions or stops at a rogue employee is the central question nobody can answer yet.
What This Means for Nvidia’s Valuation
For traders and investors, the Culper short is a reminder of how fast regulatory exposure can reprice a stock. Culper spotted the discrepancy before any legal action was public. It shorted the stock. Then the raids happened. That sequence matters.
Nvidia’s denial holds for now, but the investigation is still moving. Taiwanese prosecutors are clearly not done. And if the “tip of the iceberg” framing turns out to be accurate — if Megaspeed and Speedmatrix are just two nodes in a much larger network — the legal and financial exposure gets harder to calculate. Export control violations can carry serious penalties, and the U.S. government has been increasingly aggressive about enforcement in the AI chip space.
It’s also worth noting that Nvidia can’t easily walk away from Chinese demand even if it wants to. China has historically been one of the largest markets for high-end compute hardware. Cutting it off entirely is painful. That pain probably created the incentive for whatever arrangements Culper thinks it found.
Huang says Nvidia is clean. Culper says the numbers don’t add up. Taiwanese prosecutors are searching homes.
Frequently Asked Questions
What exactly did Culper Research claim about Nvidia’s China sales?
Culper said more than 20% of Nvidia’s fiscal 2026 compute revenue was indirectly driven by Chinese demand, allegedly routed through intermediaries including Singapore’s Megaspeed, Malaysia’s Speedmatrix, and Taiwan’s Giga Computing to get around U.S. export restrictions.
What legal action has been taken so far in the Nvidia chip smuggling investigation?
Taiwanese prosecutors searched the home and workplace of an Nvidia employee accused of smuggling restricted chips to China — the first known legal action in Taiwan’s investigation into AI chip smuggling.
