Super Micro Co-Founder and Two Others Charged With Smuggling Billions in Nvidia AI Servers to China

The co-founder of Super Micro Computer and two other individuals connected to the server maker were charged last Thursday with conspiring to illegally divert billions of dollars worth of Nvidia-powered AI servers to China, in what federal authorities described as one of the most significant export control enforcement actions tied to artificial intelligence technology U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

The indictment, unsealed in Manhattan federal court on Thursday, named Yih-Shyan Liaw, 71, a co-founder and senior vice president of Super Micro who also sits on its board of directors; Ruei-Tsan Chang, a sales manager in the company's Taiwan office; and Ting-Wei Sun, 44, a contractor . Prosecutors alleged the three men orchestrated a scheme to route servers assembled in the United States through Taiwan to Southeast Asia, where they were repackaged and forwarded to China between 2024 and 2025 Three charged in the US with smuggling AI chips into Chinaaljazeera.com·SecondaryThree people associated with artificial intelligence server maker Super Micro Computer, including its cofounder, have been charged with helping smuggle at least $2.5bn-worth of United States AI technology to China in violation of export laws, according to the US Department of Justice..

Liaw and Sun were arrested on Thursday, while Chang remains a fugitive, according to the U.S. Attorney's Office for the Southern District of New York 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S.. Liaw, a U.S. citizen based in Fremont, California, was released on bail. Sun, a Taiwanese citizen, was held for a bail hearing on Friday 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S..

A $2.5 Billion Scheme

According to the indictment, the operation generated approximately $2.5 billion in server sales for Super Micro since 2024 . Prosecutors said at least $510 million worth of servers were shipped between late April and mid-May 2025 alone, routed through the Southeast Asian intermediary and then on to China U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S.. The servers contained Nvidia graphics processing units that are subject to U.S. export controls barring their sale to China without a Commerce Department license U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

The alleged scheme involved elaborate measures to evade detection. A Southeast Asian company acting as a middleman compiled fabricated paperwork to make it appear the servers were for its own use, while a separate logistics firm repackaged them to conceal their true destination before they were shipped to China . FBI Assistant Director in Charge James Barnacle stated that the defendants used staged bogus equipment to pass audit inventories and employed a pass-through company to hide their actual client list 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S..

Perhaps most strikingly, according to the indictment, the defendants went so far as to use hair dryers to remove labels and serial numbers from the real servers and placed them on dummy machines that were left behind at the Southeast Asian company's storage facilities after the genuine equipment had been forwarded to China Three charged in the US with smuggling AI chips into Chinaaljazeera.com·SecondaryThree people associated with artificial intelligence server maker Super Micro Computer, including its cofounder, have been charged with helping smuggle at least $2.5bn-worth of United States AI technology to China in violation of export laws, according to the US Department of Justice.. During a visit from a U.S. export control officer, the defendants allegedly displayed these dummy servers to create the impression that the ordered equipment was still on site U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

Chang also worked to prevent auditors from inspecting parts of data centers where the Southeast Asian company was supposedly storing the servers. He arranged for an auditor he described as friendly to conduct the review, according to the indictment U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

Super Micro Responds

Super Micro Computer, headquartered in San Jose, California, was not itself named as a defendant in the case 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S.. The company confirmed last Thursday that it had been informed by federal prosecutors of the indictment and identified the three charged individuals as being affiliated with the firm 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S..

In a statement, Super Micro said it had placed Liaw and Chang on leave and terminated its relationship with Sun after learning of the charges . The company characterized the alleged conduct as a contravention of its policies and compliance controls, adding that it maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

The company also noted it has been cooperating fully with the government's investigation 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S.. Liaw controls approximately $464 million worth of Super Micro shares, according to FactSet U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

The charges sent shockwaves through the market. Super Micro's shares fell 33 percent on Friday after the indictment was released U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S., wiping billions from the company's market capitalization in a single trading session and raising serious questions about internal oversight at a firm that has been one of the primary beneficiaries of the AI infrastructure boom.

The stock drop was particularly notable given that Super Micro had already faced governance questions. In 2024, the company's auditor Ernst & Young resigned, and the firm subsequently brought in BDO as a replacement U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

The Broader Export Control Battle

The case arrives at a critical juncture in the U.S.-China technology competition. Washington has maintained export restrictions on advanced AI chips to China since 2022, seeking to prevent Beijing from acquiring the processing power needed to train frontier AI models Three charged in the US with smuggling AI chips into Chinaaljazeera.com·SecondaryThree people associated with artificial intelligence server maker Super Micro Computer, including its cofounder, have been charged with helping smuggle at least $2.5bn-worth of United States AI technology to China in violation of export laws, according to the US Department of Justice.. The restrictions have become a central pillar of American technology policy, with bipartisan support for keeping the most advanced semiconductors out of Chinese hands.

Nvidia's graphics processing units have become indispensable building blocks for the data centers that power artificial intelligence systems 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S.. The company's chips are in demand worldwide for training generative AI models, making them a focal point of the export control regime.

In a statement, Nvidia said strict compliance with export laws is a top priority and that it continues to work closely with customers and the government on compliance programs as export regulations have expanded . The company added that unlawful diversion of controlled U.S. computers to China is, in its words, a losing proposition across the board, noting that it does not provide any service or support for such systems 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S..

The Trump administration has taken a nuanced approach to the chip export question. Last year, the administration began loosening the ban on Nvidia's China sales for lower-tier AI chips in exchange for a 15 percent commission paid to the U.S. government 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S.. Last summer, Nvidia received licenses to export the H20 chip to China, with CEO Jensen Huang agreeing to provide 15 percent of China sales revenue to the U.S. U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

Earlier last week, Huang signaled that the AI boom will continue by predicting Nvidia will soon have a $1 trillion backlog in chip orders, doubling from his estimate a year ago 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S.. Despite the enormous demand, Nvidia did not include any China sales in the revenue forecast in its most recent financial report released late last month 3 men are charged with conspiring to smuggle US artificial intelligence to Chinaapnews.com·SecondaryVisitors walk past a Super Micro Computer Inc. booth at the Computex Taipei exhibition in Taipei, Taiwan, June 5, 2018. (AP Photo/Chiang Ying-ying, File) NEW YORK (AP) — A senior vice president of Super Micro Computer Inc. and two others affiliated with the company were charged Thursday with conspiring to smuggle billions of dollars of computer servers containing advanced Nvidia chips to China. The men violated U.S..

Escalating Ambitions

The indictment suggests the smuggling operation was growing more ambitious over time. Prosecutors alleged that Liaw pushed the Southeast Asian intermediary in late 2024 to adopt a more advanced chip, the B200, which employs Nvidia's Blackwell architecture U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S.. In text messages cited in the indictment, Liaw asked the Southeast Asian company's executive for volume forecasts across several months, suggesting the information would be used to secure B200 allocations from Nvidia U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

In 2025, Liaw allegedly sent the same executive a link to a White House statement about an upcoming export rule for AI products, indicating that shipments would need to accelerate before the rule's effective date U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S.. When a broker who had purchased Nvidia-powered servers through the Southeast Asian company later sent Liaw a link about Chinese nationals being arrested for similar smuggling offenses, Liaw allegedly responded with sobbing emojis U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

U.S. Attorney Jay Clayton, the Trump-appointed prosecutor for the Southern District of New York and former chairman of the Securities and Exchange Commission, framed the charges as essential to maintaining the credibility of the export control regime. He stated that schemes of this nature pose a direct threat to U.S. national security and that crimes involving sensitive technology must be met with swift action U.S. tech execs smuggled Nvidia chips to China, prosecutors saycnbc.com·SecondaryThe U.S. Attorney's Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment unsealed Thursday, the U.S..

What Comes Next

The indictment raises several unresolved questions. While prosecutors identified the Southeast Asian intermediary's role in detail, they did not publicly name the company, leaving open questions about how many other parties may have been involved in the supply chain and whether additional charges could follow.

For Super Micro, the immediate fallout extends beyond the stock price. The company now faces scrutiny over whether its compliance controls were genuinely robust or merely nominal, particularly given the scale and duration of the alleged diversion. The fact that a co-founder and board member was allegedly at the center of the scheme raises questions about corporate governance that investors and regulators are likely to pursue in the coming weeks.

More broadly, the case underscores the difficulty of enforcing export controls on dual-use technology in a global supply chain. As AI chips become the critical infrastructure of the 21st century, the gap between the strategic importance of controlling their distribution and the practical challenges of doing so continues to widen. The Justice Department's willingness to bring charges against senior executives at a major U.S. technology company suggests the enforcement posture is tightening — but whether that deterrence effect will be sufficient remains an open question.