Nvidia CEO, Jensen Huang
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Nvidia chief Jensen Huang is under scrutiny for an affair with a Chinese tech exec suspected of being a spy.
Culper Research flagged Huang’s connection to Alice Huang six months ago.
Here’s what to know about Culper Research, the secretive firm that detailed Nvidia’s “China problem” in May.
Jensen Huang’s relationship with an alleged Chinese spy is hitting the chipmaker’s stock on Monday, but a secretive short-seller flagged the top exec’s relationship months ago.
Nvidia stock tumbled nearly 9% at its lowest point on Monday as Wall Street reacted to news of the CEO’s affair with Chinese national Alice Huang.
The revelations probably came as no surprise to Culper Research, a short-seller that warned of the Nvidia CEO’s involvement with the female tech executive in May, publishing a report detailing its short position titled “Nvidia: The China Problem.”
“This is not a bet against AI,” Culper wrote. “We are short Nvidia for one reason: the Company has a significant China problem.”
The problem Culper saw at the time wasn’t related specifically to Huang’s romantic relationship. The firm saw issues with revenue from China that it said investors were not considering.
However, Culper flagged Huang’s ties to Alice Huang in several places throughout its report.
Alice Huang has been an executive at Megaspeed , a cloud-computing and infrastructure firm based in Singapore. Culper said that Megaspeed was among a web of Asian firms tied to Alibaba that helped China circumvent US restrictions on chip exports.
“Nvidia CEO Jensen Huang has not only vouched for Megaspeed, but seems to have quite literally walked alongside Megaspeed at every step, while maintaining an uncomfortably close relationship with Megaspeed’s Alice Huang, a Chinese national,” the report stated.
It went on to note:
“The Megaspeed employee characterized their relationship with Jensen as ‘very close’, corroborating another former Nvidia employee’s suggestion to us that many Nvidia employees wondered if there was a special relationship.”
Following Jensen Huang’s admission about an affair , Nvidia’s board of directors said it was launching “an independent investigation” after reports that he “has been the target of a foreign intelligence effort.”
What is Culper Research?
Culper’s apparent access to company insiders at both Nvidia and Megaspeed stands out, but the firm itself keeps a low profile, and its presence around the internet is minimal.
The short-seller’s website says it was founded in 2019 by Christian Lamarco to investigate companies and expose those that have “deceived investors.”
Its minuteman logo is a nod to the Revolutionary War, and its name is a reference to the Culper Spy Ring, the famous intelligence network that reported on British troop movements.
Beyond Nvidia, the firm has some other successes.
Two 2020 reports from Culper questioned pharma company CytoDyn’s clinical claims, dubbing then-CEO Nader Pourhassan the “chief promotion officer.” Pourhassan was charged with fraud and insider trading in 2022, and then was sentenced to 30 months in prison this January.
But the firm’s penchant for controversial claims has also led to defamation lawsuits, including one filed last year by star lawyer Alex Spiro on behalf of Tecnoglass that alleged Culper “deliberately published false claims linking Tecnoglass and its executives to the Sinaloa cartel.” The case was dismissed, but Spiro and Tecnoglass filed another suit earlier this year.
Lamarco himself is hard to track down, with a nearly anonymous LinkedIn page, and minimal information about him or his firm online. He previously worked at long-short fund GrizzlyRock Capital, and graduated from conservative Christian school Grove City College in 2016.
The secrecy is fitting given the Culper Spy Ring’s propensity for using pseudonyms, invisible ink, and ciphers during the American Revolution.
Culper has taken aim at other comapnies behind the AI boom and those powering it, including an October report about chip producer Cerebras, and a February report about uranium miner NexGen Energy.
Cerebras hit back at Culper’s report in a press release at the time, stating that the short-seller’s claim that Cerebras chips wear out after two years is incorrect. “Nearly every financial conclusion in that report, from our margins to the value of our OpenAI agreement, depends on that one number. That number is wrong.”
NexGen did not respond to a request for comment.
Lamarco could not be reached for comment.
The bigger picture
Culper’s report in May was a preview of the problems now facing Huang and Nvidia, and the document has been making the rounds online as the market reacts to the latest news on Monday.
Market watchers highlighted nuggets of information about Alice Huang specifically throughout the report.
“Wow jensen has a real problem here…” one user said , highlighting portions of the May report that said Huang “repeatedly vouched for Megaspeed — its single largest Southeast Asian chip buyer currently under investigation by both U.S. Commerce and Singapore authorities — as ‘wholly owned and operated by a company based and headquartered outside China, with no China shareholders.'”
Culper’s report said that documents indicated Megaspeed is tied to Alibaba, which recent reporting confirmed. The New York Times also reported on Monday that an investigation into Megaspeed by the Commerce Department was halted late last year after outreach from Nvidia.
Other short-sellers have also focused on Nvidia recently. Hunterbrook Capital, while not currently betting against it, released a report on the AI chip leader last week in which it highlighted its central role in the increasingly complex web of AI financing deals.
Hunterbrook co-founder Sam Koppleman told Business Insider that he sees the news of Jensen Huang’s affair as highly significant for the company. Koppleman praised Culper in his Sunday newsletter for being the first to report on the relationship between Jensen Huang and Alice Huang.
In Koppelman’s view, the development could have major implications for the wider AI trade.
“This is a story seemingly about an influence operation from China to try to access chips to help them in the race to artificial general intelligence against the United States,” he stated. “What we learned this weekend is that the most powerful CEO in AI may be compromised.”
Nvidia did not respond to a request for comment.
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