Alibaba Drops 6.8% as Nvidia Dispute Fuels Chip Concerns

The decline outpaced a 2.4% fall in the Hang Seng Tech index. The Wall Street Journal reported that Nvidia’s board was preparing to remove Chief Executive Jensen Huang after an affair with Alice Huang, an executive at data company Megaspeed who is suspected of spying for China.

Alibaba was a key Megaspeed client, the Journal reported. The Singapore-based company placed many Nvidia servers it acquired in Malaysian data centers and supplied computing power to Alibaba.

U.S. lawmakers are calling for tighter chip-export restrictions following the controversy. Advanced Nvidia chips have been critical to Chinese AI developers seeking to build frontier models capable of competing with Western rivals. Other Chinese AI stocks also fell in Hong Kong: MiniMax closed 7.8% lower and Z.AI dropped 9.05%.