Alibaba Shares Fall 7.1% as U.S. AI Chip Restrictions Concerns Mount

Key Facts

Alibaba shares in Hong Kong fell as much as 7.1% on Thursday, November 12, amid concerns that the Megaspeed case could prompt Washington to tighten restrictions on Chinese AI companies’ access to advanced chips, Reuters reported. The pressure on the stock coincided with efforts by Chinese companies to rent computing capacity equipped with Nvidia chips outside the country, amid concern that remote use could be restricted. The moves also included shares of other companies working on AI models: Z.AI and MiniMax fell at least 7%, according to the report. That puts access to advanced computing outside China at the center of investor concerns about the sector. EL7 data showed Alibaba closing at 101.52 on November 11, a close that preceded Thursday’s session and does not by itself establish the stock’s level during that session.

Data centers outside China allow Chinese companies to use advanced processors remotely by renting computing capacity, Reuters reported. This route gives companies access to advanced computing resources without those processors being located in China, but it could change if Washington tightens controls on cloud access. The concerns cited in the report therefore focus on the possibility that restrictions could extend to remote use, alongside restrictions on access to the chips themselves. These concerns do not establish that Alibaba used restricted chips or rented computing capacity through Megaspeed; the reports concern investigations and allegations involving the company and chip diversion routes. This point matters in assessing the stock’s move because the case raises regulatory questions about the infrastructure on which Chinese AI companies rely.

In the United States, the House of Representatives passed a bill in January 2026 giving the Commerce Department authority to regulate remote cloud access to restricted technology, in a vote of 369 to 22, Reuters reported. The bill awaits action by the Senate, making its legislative progress the next milestone in the debate over how remote use could be brought under U.S. controls. House passage does not mean the authority is in effect; the legislative process is not complete. The case thus adds a political dimension to market concerns, alongside ongoing investigations into chip transactions and export-control compliance. Senator Mark Warner and Representative Hakeem Jeffries expressed interest in following the investigation, according to the Associated Press.

Singapore’s police and customs authorities began a separate investigation into Megaspeed and several companies and their officials in February 2025, according to Singapore’s Ministry of Home Affairs. The ministry said the U.S. Bureau of Industry and Security conducted a voluntary post-shipment verification at Megaspeed on June 24, 2025, in the presence of Alice Huang, and that the visit was Singapore’s first awareness of U.S. interest in the company and Huang. Reuters reported that Megaspeed said it had cooperated with U.S. inspections and hired a U.S. law firm to inventory its graphics processing units and independently verify its compliance with export controls. Nvidia had said, according to the Associated Press, that its compliance team reviewed Megaspeed’s status and concluded it was doing nothing illegal. The Associated Press reported that the company bought more than $4.8 billion in Nvidia chips during the two years before its report, a figure that shows the scale of the purchases under scrutiny without establishing a violation.

The Associated Press also covered a lawsuit filed by a shareholder against Nvidia and its CEO, Jensen Huang, accusing them of misleading investors about reports involving Alice Huang. The lawsuit alleged that Nvidia’s statements about Megaspeed were misleading, while reports concerned suspicions that the company helped circumvent U.S. export restrictions on China. These are allegations and investigations, not proof that Alibaba itself used restricted chips through Megaspeed. Nvidia said its board had hired a law firm to conduct a “thorough and independent investigation,” while Huang said in an open letter: “I support the investigation and will cooperate fully.” Separately, Nvidia shares fell 4.3% on November 9, losing about $190 billion in market value, then continued lower by about 5.5% at the November 10 close, according to the Associated Press.

Alibaba is due to publish its unaudited results for the quarter ended September 30, 2026, before the U.S. market opens on November 19, the company said. The results will provide a timely disclosure for a financial period that preceded the session in which the stock fell, while questions about access to computing capacity and regulatory restrictions remain part of the discussion around its AI business. The results date follows developments related to the Megaspeed investigations and the U.S. bill on remote access. The next legislative step depends on the Senate, while Singaporean authorities said their investigation is independent. These milestones support continued monitoring of the regulatory and operational risks surrounding Chinese AI companies’ access to chips and advanced computing.