Nvidia shares also fell significantly on Tuesday. On a weekly basis, the US company is around 19 percent lower. A short seller warned of a problem months ago.
Nvidia boss Jensen Huang: The chip manufacturer's papers are under pressure after his affair with a suspected spy. Photo: AFP
According to the text, Nvidia's market value fell from almost $5.0 to around $4.0 trillion within a week. On a monthly basis, the price loss is around 19 percent.
US President Donald Trump said the FBI was investigating Nvidia boss Jensen Huang's affair with a suspected Chinese spy.
A shareholder has sued Nvidia and Huang and is seeking a class action lawsuit. He accuses them of not disclosing the affair and of making false statements about their relationship with Megaspeed.
Culper Research warned of a “China problem” in May and located 20 percent of computing power sales in China. An ex-employee quoted by Culper said 20 to 40 percent of sales.
The summary was created and editorially checked using AI.
New York. Shares of the US chip manufacturer Nvidia also slipped significantly for the second day in a row. After the group had already closed trading around 8.0 percent lower on Monday, the shares also fell significantly on Tuesday. During trading, the group fell by up to seven percent.
On a monthly basis, this results in a price loss of around 19 percent. Within a week, Nvidia's market value shrank from almost $5.0 trillion to around $4.0 trillion.
The background to this week's price slide is CEO Jensen Huang's affair with a suspected Chinese spy, Alice Huang. According to media reports citing intelligence information, the manager of the Singapore-based data center group Megaspeed is said to have passed on information to Beijing.
The incident raises fears that Beijing is using unfair means to gain access to Nvidia's most advanced chips used for AI development, whose export to China is restricted.
On Monday evening, US President Donald Trump announced that the FBI was investigating Nvidia boss Jensen Huang's affair with a possible Chinese spy. The US federal police are reviewing the case, Trump said at a press conference in the White House.
Meanwhile, more trouble is brewing. A shareholder in the company has sued Nvidia and its boss Huang, it became known on Monday evening. The accusation: They are said to have failed to disclose the affair and to have provided false information about the company's relationships with the woman's company. This created significant risks to Nvidia's reputation and business prospects, according to the lawsuit filed in a California court.
The private investor is seeking a class action lawsuit. He wants to represent all investors who bought Nvidia shares between October 9th and November 8th. He is seeking unspecified damages and a jury trial.
Markets Insight
AI star Nvidia is losing its shine
Shortseller warned of “China problem” in May
However, one investor may have benefited from the recent price losses. The US short seller Culper Research had already pointed out Nvidia's "China problem" and an "uncomfortably close" relationship between Jensen Huang and Alice Huang in a report in May.
Shortsellers bet on falling prices, so they profit if the stocks of the companies they target fall. The focus of Culper, whose name is based on the Culper spy ring from the American Revolutionary War, was Nvidia.
In the 40-page report, the company wrote that it believes that 20 percent of Nvidia's computing power sales come from China - supported by illegal GPU diversions such as those carried out by Southeast Asian intermediaries. Nvidia had previously claimed that its business to China had dropped to "zero".
Analysts at New York-based shortseller Culper wrote that documents they uncovered indicated that Megaspeed was secretly financed by Chinese tech giant Alibaba through a series of “obvious shell companies.” They also questioned Megaspeed's total assets explosion between 2023 and 2024: "from just $33 million to $3.0 billion."
Culper expects higher Chinese business
Culper Research is said to have spoken to several Nvidia employees, one of whom described Megaspeed as just the “tip of the iceberg”.
A former Nvidia employee quoted by the short sellers assumes that the Chinese market accounts for around 20 to 40 percent of sales. Accordingly, China is finding ways to obtain the chips. "That's just how the business works. And I know this because I used to go to Singapore a lot: they have their own rules. They just take the GPUs and say it's a smartphone."
In the report, the analysts also pointed out complex connections that suggested that Nvidia has business relationships with other companies that are connected to Megaspeed and through which Nvidia chips get to China.
Analysts viewed China as a potential growth opportunity, Culper Research wrote in its May report. “We believe the exact opposite is true.” According to the shortseller, Nvidia's China business is now actually approaching zero. Measures from Beijing would block Nvidia imports in favor of its own domestic alternatives.
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“We are short Nvidia and expect the stock to continue to decline,” Culper wrote in May. Almost six months later, Nvidia shares are around 23 percent lower.
With agency material
