Six months before the Nvidia spy scandal broke, evidence of a conspiracy emerged on the internet

Nvidia chief executive Jensen Huang’s illicit relationship with a suspected Chinese intelligence agent was one of the great profit-making opportunities of the year — and all it would have taken to cash in was to read and believe X, the social media site.

On May 13, an American investment fund, Culper Research, posted 17 tweets alleging that Nvidia was illegally selling computer chips to China through a Singapore company called Megaspeed. Mr Huang is “maintaining an uncomfortably close relationship with Megaspeed’s Alice Huang, a Chinese national“, Culper wrote, posting three images of the two together in public.

The posts summarised a 40-page report that inferred Alice Huang and Jensen Huang may have been in a romantic relationship and engaged in a conspiracy to break a US government embargo on selling artificial intelligence chips to China.

“Jensen Claims Total Ignorance of Any Diversion,” Culper wrote. “Is He An Idiot, or Is He In On It?”

Last Friday the New York Times reported that Alice Huang, who is not related to Mr Huang, had been identified by the Trump administration as a spy for China’s Ministry of State Security.

The news that one of the world’s most-important businessmen may have been compromised by a Chinese intelligence service sent Nvidia shares tumbling about 16 per cent over the past week and a half, reducing its value by $1.2 trillion, the equivalent of four BHPs.

Through what is known as “short selling”, investors can borrow shares and sell them, betting they will fall in price.

Culper said in May that it had shorted Nvidia shares, an extremely risky trade given the company was the most important supplier of chips necessary for what many considered was one of the greatest technological leaps ever.

Culper’s report, which included a YouTube video of the Huangs outside a Taipei restaurant, was largely ignored by the press at the time.

Decline and recovery

It marked the start of a decline in Nvidia shares that lasted two months. The stock resumed its climb in July and peaked in early October, helped by bullish endorsements from investment banks Goldman Sachs and Morgan Stanley.

As a leader of the AI revolution, Mr Huang was treated like a rockstar. He travelled with President Donald Trump to China on Air Force One to meet President Xi Jinping with other tech CEOs.

The Culper report wasn’t the last opportunity for investors to make money on Nvidia’s problems.

On October 29, an Australian journalist at the New York Times, Jonathan Swan, was the lead writer on an article that reported a woman named Alice Huang “was a Chinese intelligence asset” who had developed “a close relationship” with Mr Huang.

The shares slipped little at first, then accelerated their decline as other media outlets covered the assertions, which the company failed to deny.

On Sunday Mr Huang admitted that he had been “unfaithful” to his wife in a note to his employees. Nvidia, which he co-founded and has slipped behind Apple in the ranks of top companies, has commissioned an internal investigation into the spying allegations.

The Chinese foreign affairs ministry said the allegations were “entirely baseless and amount to nothing more than smears and attempts to discredit China”.

A Sydney fund manager who specialises in short selling, John Hempton, credited the seven-year-old, New York-based Culper with breaking one of the biggest business stories of the year.

“Next time you think that short sellers just make shit up - have a look at this SIX MONTH OLD tweet - which basically alleges the affair that is now news,” he wrote on X.

It is not known how much, if any, money Culper made from short selling Nvidia, but the trade is already being referred to online as “legendary”.