Culper Research alleges NVIDIA earns 20% revenue from China
Culper Research released a report alleging that NVIDIA generates over 20% of its FY2026 AI compute revenue from China. The revenue allegedly flows through illegal chip smuggling and a network of Southeast Asian intermediaries including Singapore-based Megaspeed financed by Alibaba. The report details overlapping shell companies that install dummy servers in data centers to evade export controls, contradicting NVIDIA statements that such sales have dropped to zero.
#918Zvi Mowshowitz@THEZVIThe obvious problem with this short case is, assuming it is all true... so what is the United States gonna do about it, exactly?
(If the answer is 'shut down the smuggling' then, well, maybe, I hope so, but they'll just sell those chips to the West anyway.)
Tim Fist@fiiiiiistIf true, the facts alleged here are pretty damning for NVIDIA. Claims from the report: - While NVIDIA claims that its compute revenues from China have dropped to zero, over 20% of its FY2026 AI compute revenue was driven by China, both through illegal chip smuggling and the use of intermediaries in SE Asia. - This revenue seems to have come from an overlapping network of SE Asian companies and shell intermediaries who use a common playbook: install dummy servers in their data centers to fool inspections, then smuggle the actual servers into China. - At the center of this is the Singaporean company Megaspeed, which seems to be implicated in a bunch of different smuggling cases. The report also alleges that they maintain very close ties with NVIDIA, including Jensen personally. About Megaspeed: - Allegedly, Megaspeed was secretly financed by the Chinese company Alibaba via a series of shell companies. - They received $4B worth of AI servers from Aivres Systems. Aivres was formerly known as Inspur Systems but was rebranded after its parent company was added to the US Entity List (a blacklist used to restrict exports of controlled items, such as AI chips, to particular entities). Aivres is one-third owned by the Chinese state. - Bridge Data Centers (BDC), a Singaporean hyperscaler backed by Bain Capital, dropped Megaspeed as a client. A source cited by the report claims that BDC had found that Megaspeed was installing dummy servers in their Malaysian data centers and smuggling the actual AI servers into China. - Megaspeed also appears to be linked to a shell entity called OBON - they have overlapping websites and shared officers/shareholders. OBON was reportedly an intermediary used by Supermicro (a server manufacturer) in smuggling at least $2.5B worth of NVIDIA servers to China. The DOJ indicted three Supermicro individuals for this case, including one of the co-founders. The pattern here was the same – dummy servers placed in inspection locations while the real AI servers are shipped to China. - According to a Megaspeed employee, Jensen visits their data centers every few months, almost always at the same time as Alibaba representatives. He has also been spotted on several occasions meeting with one of Megaspeed’s execs, Alice Huang (a Chinese national). - NVIDIA reportedly has several partners that work with Megaspeed, including Giga Computing and YTL, which recently opened a $4.3B Blackwell-based data center in Malaysia. Also of note: - Many of these sales involved indicators that should have flagged NVIDIA’s KYC protocols to prevent smuggling, such as recently incorporated customers suddenly placing large orders. Multiple former NVIDIA employees agreed with this. - As of October 2025, NVIDIA changed the way it reports geographic revenue, eliminating Singapore as a reported geography. This was at the same time that Singapore went from ~9% to 20% of revenue, and was facing heavy scrutiny as a smuggling hub.
@fiiiiiist Yeah, I guess this could push congress especially to be strong on export controls. I still don't have any expectation of serious fines or anything that would justify a short play.
#1359Peter Wildeford🇺🇸🚀@PETERWILDEFORDNVIDIA's ties to potential Chinese chip smuggling are suspicious 🤔
Tim Fist@fiiiiiistIf true, the facts alleged here are pretty damning for NVIDIA. Claims from the report: - While NVIDIA claims that its compute revenues from China have dropped to zero, over 20% of its FY2026 AI compute revenue was driven by China, both through illegal chip smuggling and the use of intermediaries in SE Asia. - This revenue seems to have come from an overlapping network of SE Asian companies and shell intermediaries who use a common playbook: install dummy servers in their data centers to fool inspections, then smuggle the actual servers into China. - At the center of this is the Singaporean company Megaspeed, which seems to be implicated in a bunch of different smuggling cases. The report also alleges that they maintain very close ties with NVIDIA, including Jensen personally. About Megaspeed: - Allegedly, Megaspeed was secretly financed by the Chinese company Alibaba via a series of shell companies. - They received $4B worth of AI servers from Aivres Systems. Aivres was formerly known as Inspur Systems but was rebranded after its parent company was added to the US Entity List (a blacklist used to restrict exports of controlled items, such as AI chips, to particular entities). Aivres is one-third owned by the Chinese state. - Bridge Data Centers (BDC), a Singaporean hyperscaler backed by Bain Capital, dropped Megaspeed as a client. A source cited by the report claims that BDC had found that Megaspeed was installing dummy servers in their Malaysian data centers and smuggling the actual AI servers into China. - Megaspeed also appears to be linked to a shell entity called OBON - they have overlapping websites and shared officers/shareholders. OBON was reportedly an intermediary used by Supermicro (a server manufacturer) in smuggling at least $2.5B worth of NVIDIA servers to China. The DOJ indicted three Supermicro individuals for this case, including one of the co-founders. The pattern here was the same – dummy servers placed in inspection locations while the real AI servers are shipped to China. - According to a Megaspeed employee, Jensen visits their data centers every few months, almost always at the same time as Alibaba representatives. He has also been spotted on several occasions meeting with one of Megaspeed’s execs, Alice Huang (a Chinese national). - NVIDIA reportedly has several partners that work with Megaspeed, including Giga Computing and YTL, which recently opened a $4.3B Blackwell-based data center in Malaysia. Also of note: - Many of these sales involved indicators that should have flagged NVIDIA’s KYC protocols to prevent smuggling, such as recently incorporated customers suddenly placing large orders. Multiple former NVIDIA employees agreed with this. - As of October 2025, NVIDIA changed the way it reports geographic revenue, eliminating Singapore as a reported geography. This was at the same time that Singapore went from ~9% to 20% of revenue, and was facing heavy scrutiny as a smuggling hub.