Earlier this week, the Financial Times identified Alibaba as an “anchor customer” for Megaspeed, the Singapore-based neocloud formerly led by Alice Huang.
Huang, the alleged Chinese intelligence asset whose romantic relationship with Jensen Huang put Nvidia at the center of a global espionage scandal, boasted of her company’s access to Nvidia GPUs while pitching China-based investors on Megaspeed’s data centers.
Long story short, Alibaba became Megaspeed’s main customer, providing financing through a Singaporean subsidiary. Megaspeed’s business relationship with Alibaba helped bolster the former’s profile with Nvidia.
Although the FT was keen to emphasize that nothing in its reporting established wrongdoing by any of the parties involved, including Alibaba, the article confirmed key elements of a report by New York short seller Culper Research.
In May, Culper flagged a 2024 transaction between Apex Enterprise Solutions, Alibaba’s Singaporean subsidiary, and Speedmatrix, Megaspeed’s Malaysian unit through which some of the billions in Nvidia hardware Megaspeed purchased were routed.
If indeed Alibaba is Megaspeed’s main customer, that’d suggest the potential implosion of the company’s relationship with Nvidia could jeopardize a portion of Alibaba’s Nvidia-powered cloud capacity.
On Thursday, Alibaba’s Hong Kong-listed shares dove nearly 7%, capping a five-day losing streak with their second-worst session of 2026.
The shares came within $5 of taking out the June lows on Thursday. If they had, the stock would trade at its worst levels since January of 2025.
Note that the rolling five-session loss for Alibaba, a 14% cumulative drop, is the deepest such decline since “Liberation Day.”
I won’t pretend to know how heavily Alibaba relies on Megaspeed for advanced cloud capacity, but I will brave a prediction that Colette Kress will “revisit” Nvidia’s relationship with Megaspeed.
China’s concerned about all of this. Alice is reportedly back in Beijing (“You’ve been compromised, we gotta get you back home!”), where a spokesperson for Wang Yi’s foreign ministry insisted Thursday that the country’s “scientific progress relies on independent innovation.”
The same party mouthpiece — one, but certainly not the, Mao — demanded America “stop fabricating Chinese spy narratives as a pretext for imposing technology restrictions.”
Back on Capitol Hill, Democrats are making demands in anticipation of taking control in January. On Wednedsay, Elizabeth Warren told Howard Lutnick, Stephen Miller and Marco Rubio to preserve documents related to the Huang saga.
“Reports suggest that officials within the government — including at the White House, State Department and Commerce Department — were aware of concerns about Nvidia, its relationship with Megaspeed and the suspected Chinese intelligence operation, yet did not move to block the continued flow of advanced AI chips to Megaspeed or other companies affiliated with the suspected operative,” Warren wrote. “Questions also remain regarding whether or not prudent defensive counter-intelligence action was taken or national security recommendations were overruled.”
The administration has until Tuesday to “confirm in writing that preservation directives have been issued” and to brief members of Congress “regarding the risks this operation may have posed to [America’s] national security.”
Nvidia’s CDS is loitering near a record high amid the spiraling drama, which I can assure you will dog the company, if not necessarily the stock, for years.
Early Thursday in the US, Nvidia’s board made it official: Huang’s done. The announcement came around 12 hours after the Wall Street Journal first reported the board was poised to oust him.
As expected, Kress will take the reins on an interim basis. “Jensen’s contributions to Nvidia are profound. Nvidia is one of the most consequential technology companies in the world,” the board statement read. “The board and the company thank Jensen for his immeasurable contributions to the company and the industry.”
And if you thought the circular financing is an inscrutable web…
The ‘spy stuff’ is a red herring.
Could be. I’m now reading how this may be fuel to lead to regulating open weight models to protect OpenAI and Anthropic margins using national security as the catalyst for building moats.
Very likely. It’s a Trumpian solution. Thanks to Jensen’s follies, the White House can justify a ban because the Chinese models were developed using stolen US hardware. Along with the routine national security justification.
One more nail in AI’s oversold mystique. What a ‘long strange trip’ it’s been and will continue to be. If I was a betting man, I’d bet that the US government will fail at uncovering and telling the whole story. We still can’t put to bed JFK’s assassination and all the alien spaceship crashes. Hell, maybe we have an alien or alien brain locked up somewhere and they/it are actually behind AI. Human Race, better slow down a bit. If you’re heading over a cliff, at least delay the time until impact.
Thumbs up!
Musk has previously shown an interest in hiring Jason. The plot may thicken more.
“Huang-gate”?
Naah, doesn’t have a good ring to it.
Wow, the tinfoil hats are really coming out for this one. I’m an Occam’s razor guy: the simplest explanation is usually the correct one. In this case? The man wanted to get his d!ck wet in some strange.
Meanwhile, somewhere in China, Ms. Huang has the quiet satisfaction of knowing that she may well go down in history as the single most expensive piece of ass since Helen of Troy.