A senior vice president of Super Micro Computer Inc. and two associates have been charged with conspiring to smuggle advanced computer servers containing Nvidia chips to China.
The indictment accuses the defendants of violating US export control laws by diverting high-performance servers assembled in the United States to China between 2024 and 2025.
Fraudulent Tactics Exposed
FBI Assistant Director in Charge James C. Barnacle Jr. said the defendants used fraudulent documents, staged fake equipment for audits, and routed shipments through a pass-through company to conceal their activities and true customers.
US Attorney Jay Clayton called the scheme a direct threat to national security.
Nvidia’s processors power data centers critical for artificial intelligence, a technology poised to reshape societies and global power balances. The US-China AI competition echoes past arms races, like the one between the US and Germany in World War II.
Export Bans in the AI Race
President Joe Biden has restricted Nvidia’s AI chip sales to China, a policy continued from President Donald Trump’s administration on the most powerful processors. Last year, the Trump administration eased bans on lower-tier chips in exchange for a 15% US government commission. Nvidia reported no expected revenue from China in its latest forecasts.
Yih-Shyan ‘Wally’ Liaw, 71, a US citizen and Super Micro’s senior vice president, was arrested in California alongside Ting-Wei ‘Willy’ Sun, 44, a company contractor. Ruei-Tsang ‘Steven’ Chang, a Taiwan-based sales manager, remains at large. Liaw was released on bail; Sun, a Taiwanese citizen, awaits a hearing. No lawyers for the defendants are listed.
$2.5 Billion Orders Rerouted
The indictment states Liaw and Chang instructed executives of a Southeast Asian company to order $2.5 billion in servers from Super Micro between 2024 and 2025. The plot grew bolder, with at least $510 million in US-assembled servers diverted to China.
Super Micro did not name the Southeast Asian firm but stated the alleged conduct violates its policies and compliance controls, including export laws. The company is fully cooperating with authorities.
Companies Reaffirm Compliance
Nvidia stressed its compliance efforts, noting it works with customers and the government as regulations tighten. It called unlawful diversions to China futile, given rigorous enforcement and lack of support for such systems.
Despite China restrictions, Nvidia’s market value has soared from $400 billion at the end of 2022 to $4.3 trillion, making it the world’s most valuable company. Earlier this week, CEO Jensen Huang forecasted a $1 trillion AI chip order backlog, double his prior estimate.
