Alibaba shares drop 7.1% as Nvidia scandal threatens China’s AI supply chain and links to Megaspeed International emerge
Alibaba Group’s (Alibaba) shares fell 7.1% in Hong Kong amid the Nvidia governance and espionage scandal affecting China’s AI sector.
The crisis, originally a boardroom issue at Nvidia, has grown into a major supply-chain and regulatory threat for Chinese AI developers.
Alibaba is significantly involved with Megaspeed International, a cloud infrastructure firm linked to espionage allegations.
Alibaba has been a major client of Megaspeed, using restricted Nvidia GPUs for its AI models.
Deep links
Recent disclosures indicate Alibaba’s extensive operational and financial ties with Megaspeed.
Founded by Alice Huang, whom U.S. intelligence suspects of espionage, Megaspeed is central to this emerging scandal.
Alibaba rented data center capacity, using restricted Nvidia GPUs, to advance its AI technologies.
Approximately 240,000 restricted processors were linked to Alice Huang and Megaspeed’s Shanghai partner, impacting Alibaba and other Chinese AI developers such as Tencent.
Alibaba’s subsidiary, Apex Enterprise Solutions, financed Speedmatrix, a Malaysian Megaspeed-linked subsidiary.
In 2024, Alibaba extended loans to Megaspeed through its subsidiaries.
