Dell shares slide over banned Nvidia chips found in China

Dell Technologies shares fell about 8% on Friday, Nov. 13. Bloomberg reported that Dell servers containing restricted Nvidia ↘ 2.01% chips had been installed at a Shanghai data center linked to Alice Huang, the woman at the center of the scandal that led to Jensen Huang's exit as Nvidia's chief executive. The report raised new questions about how U.S. export controls are enforced. It came as investors were already selling AI hardware stocks.

What Bloomberg found

Bloomberg said documents it reviewed showed that a Chinese company founded by Alice Huang obtained smuggled AI chips. Those chips were installed at a Shanghai facility with ties to Megaspeed International. Singapore-based Aperia Cloud Services, an official Nvidia Cloud Partner, bought 22 Dell servers with Nvidia H800 chips. Washington barred sales of the H800 to China in 2023. Reason quoted the Bloomberg report as saying a person familiar with the deal confirmed from the servers' serial numbers that Aperia was Dell's customer.bloomberg.com+1

Dell told Bloomberg it "stopped all sales and support to Aperia International in February 2025 due to unauthorized diversion concerns," Quartz reported. The servers showed up in filings from a unit of Shanghai Longteng Intelligent Computing, which Alice Huang founded about 10 years ago. The company listed them among 193 servers it pledged to secure financing in January 2025. According to Engadget, she left Shanghai Longteng in 2017, and the documents do not say whether she was personally involved in buying the chips. Hromadske reported that Aperia denies wrongdoing. Super Micro Computer ↘ 0.46% said its sales complied with U.S. export controls.engadget.com+2

A broader AI selloff

Dell was not the only AI hardware stock to drop. Reuters reported that Nvidia-backed cloud companies CoreWeave ↘ 6.13% and Nebius Group ↘ 10.18% fell 10.8% and 12.1%. Advanced Micro Devices ↘ 8.75% lost 10.2%. Server makers Dell and Hewlett Packard Enterprise ↘ 4.11% also declined as worries about AI financing grew after Huang's sudden departure. According to Benzinga, technology was the day's worst-performing sector, and the Nasdaq Composite fell more than the S&P 500 ↘ 0.38%.benzinga.com+1

Investing.com said a UBS ↘ 0.35% downgrade of Dell on Thursday, Nov. 12, also weighed on the stock. Dell had gained sharply earlier in the year. 24/7 Wall St. reported that the stock was still up 174% year to date even after Friday's drop, although it has fallen steeply over the past month.investing.com+1

Earnings ahead

Dell is set to report fiscal third-quarter results on Tuesday, Nov. 24. Benzinga said analysts expect earnings of $6.55 per share on revenue of $49.21 billion. Investors will be watching AI server demand. After the company's last report, Chief Executive Jeff Clarke said Dell had a record $95 billion AI backlog. "Demand outstrips supply," Dell's management said on that call, 24/7 Wall St. reported.247wallst.com+1