Super Micro Computer Co-Founder Charged in $2.5 Billion Scheme to Export AI Tech to China

Three Charged by US With Plot to Illegally Send AI Tech to China

A co-founder of Super Micro Computer Inc. was charged in New York with an alleged conspiracy to illegally divert billions of dollars in artificial intelligence technology to China. US prosecutors charged Yih-Shyan "Wally" Liaw with scheming to send high-performance computer servers assembled in the US with sophisticated AI capabilities to China in violation of US export controls. Liaw and others at the company allegedly sold the AI tech through a Southeast Asia company knowing it would be sent on to China. Also charged in the case are Ruei-Tsang "Steven" Chang, who served as a manager in the company's Taiwan office, and Ting-Wei "Willy" Sun, an outside contractor described by US authorities as a "fixer" who allegedly aided in the diversion. Shares of Super Micro fell more than 9% in late trading. The stock had been up 5.2% this year through Thursday's close. Super Micro said in a statement that it has put Liaw and Chang on administrative leave and ended its relationship with Sun. The company said it has been cooperating with the government's investigation and will continue to do so. "The conduct by these individuals alleged in the indictment is a contravention of the company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," Super Micro said in the statement. The company said it "maintains a robust compliance program and is committed to full adherence to all applicable US export and re-export control laws and regulations." Liaw co-founded Super Micro in 1993, according to a profile on the company's website, and was on its board of directors. Since 2022 he was senior vice president, business development.

Supermicro co-founder charged in conspiracy to export Nvidia chips to China

Supermicro's co-founder and two others working for the company have been indicted in New York for allegedly violating US export controls by smuggling $2.5bn of Nvidia's AI chip servers to Chinese customers. The US attorney's office for the Southern District of New York said Wally Liaw, a co-founder and member of Supermicro's board of directors, conspired with a Taiwan-based Supermicro employee and a contractor to co-ordinate illegal shipments of chips to China. The announcement by New York's top federal prosecutor Jay Clayton following an FBI investigation is by far the largest case yet by US law enforcement claiming that Nvidia's chips are being smuggled into China via employees at one of its biggest server partners. Supermicro shares fell 12 per cent in after-hours trading on Thursday. Liaw, who served as senior vice-president of business development, and the contractor Willy Sun have been arrested. Steven Chang, a Supermicro sales manager in Taiwan and a Taiwanese citizen, "remains a fugitive", the US Department of Justice said in a press release. Liaw, Sun and Chang could not be reached for comment. Supermicro is not named as a defendant in the indictment unveiled on Thursday. The $18.5bn company packages Nvidia's AI chips into servers for sale to customers, including US tech groups. It comes as Nvidia is poised to start shipping its older but powerful H200 chips to China after a breakthrough deal with the Trump administration in December. Successive US administrations have clamped down on Nvidia's ability to sell its AI chips to China -- something that chief executive Jensen Huang has lobbied heavily against. "Supermicro maintains a robust compliance programme and is committed to full adherence to all applicable US export and re-export control laws and regulations," Supermicro said, adding that it had placed its employees on administrative leave and severed its relationship with the contractor. Nvidia said in a statement that "strict compliance is a top priority for Nvidia" and that the "unlawful diversion of controlled US computers to China is a losing proposition across the board". "Nvidia does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective," the company added. Huang has previously dismissed warnings that the company's chips enter China illegally, saying there is no evidence of large-scale chip diversion despite an FT report last year that large numbers of its restricted chips were making it into the country. The indictment says the defendants used a company based in south-east Asia as a "pass-through entity" to ship Nvidia's chips from Taiwan through to China using third-party brokers. The scheme included repackaging Supermicro's servers and placing them in unmarked boxes to conceal their contents, it says. It resulted in the pass-through entity becoming one of Supermicro's largest customers, accounting for $99.7mn in revenue in the final quarter of its 2024 financial year, the indictment says. More than $510mn of Nvidia servers assembled in the US were diverted to China between late April 2025 and mid-May 2025, it added. Supermicro has been recovering from an auditing scandal in 2024 that led to delayed financial releases. Its chief financial officer was later replaced. An independent probe found no evidence of fraud. The investigation revealed on Thursday marks the latest chip smuggling probe after two Chinese nationals in Los Angeles were arrested in August last year for shipping Nvidia's chips to China. In December, Texas law enforcement arrested two businessmen for allegedly smuggling Nvidia's AI chips into China, seizing $50mn in Nvidia technology as well as cash. Additional reporting by Kaye Wiggins

US charges three people with conspiring to divert AI tech to China

WASHINGTON, March 19 (Reuters) - The U.S. Justice Department said on Thursday that three people have been charged with conspiring to unlawfully divert U.S. artificial intelligence technology to China. The FBI said Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun "allegedly conspired to sell billions of dollars worth of servers integrating sensitive, controlled graphic processing units to buyers in China, in violation of U.S. export control laws." Many high-performance AI computer servers are made with Nvidia (NVDA.O), opens new tab ⁠chips. Liaw co-founded AI-optimized server maker Super Micro Computer Inc (SMCI.O), opens new tab in 1993, and joined its board of directors in 2023, according to a 2023 Super Micro press release. The DOJ accused the three people of participating in a systematic scheme to divert large quantities of AI technology to customers in China. The DOJ statement did not mention Super Micro by name. It, however, said Liaw is a "co-founder, board member, and senior vice president of business development of a publicly traded U.S.-based manufacturer that designs and builds high-performance computer servers for artificial intelligence and cloud computing applications, including servers that ⁠integrate artificial intelligence graphics processing units (GPUs)." The DOJ statement described Chang as a general manager in the Taiwan office of the same U.S.-based manufacturer as Liaw, while it cast Sun as a third-party broker and "fixer" who worked with Liaw and Chang. Super Micro could not immediately be reached for comment. The DOJ indictment was unsealed ⁠on Thursday in a Manhattan federal court. The DOJ said Liaw, a U.S. citizen, and Sun, a citizen of Taiwan, were arrested on Thursday while Chang, a citizen of Taiwan, remains a fugitive. "Together, the defendants ⁠and others conspired to systematically divert the U.S. manufacturer's servers with certain GPUs to China without a license to do so from the U.S. Department of Commerce," the U.S. DOJ ⁠said. The defendants allegedly fabricated documents, staged bogus equipment to pass audit inventories, and used a pass-through company to conceal misconduct and true clientele list, the DOJ said. Reporting by Kanishka Singh in Washington, additional reporting by Karen Freifeld and Maria Tsvetkova; editing by Michelle Nichols Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Criminal * Data Privacy Kanishka Singh Thomson Reuters Kanishka Singh is a breaking news reporter for Reuters in Washington DC, who primarily covers US politics and national affairs in his current role. His past breaking news coverage has spanned across a range of topics like the Black Lives Matter movement; the US elections; the 2021 Capitol riots and their follow up probes; the Brexit deal; US-China trade tensions; the NATO withdrawal from Afghanistan; the COVID-19 pandemic; and a 2019 Supreme Court verdict on a religious dispute site in his native India.

3 men are charged with conspiring to smuggle US artificial intelligence to China

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. export controls laws by scheming to divert massive quantities of the high-performance servers assembled in the United States to China between 2024 and 2025, according to the indictment in Manhattan federal court. In a release, FBI Assistant Director in Charge James C. Barnacle Jr. said the defendants used fabricated documents, staged bogus equipment to pass audit inventories and utilized a pass-through company to conceal their misconduct and true clientele list. U.S. Attorney Jay Clayton said schemes such as this "pose a direct threat to U.S. national security." Nvidia's processors have emerged as indispensable building blocks for the data centers that power artificial intelligence -- a potentially game-changing technology that could reshape society and change the balance of power in the world. For that reason, the U.S. and China are dueling to gain the upper hand in AI, evoking memories of the arms race between the U.S. and Germany to develop the first nuclear bomb during World War II. To help gain the upper hand, President Joe Biden's put restrictions on the sale of Nvidia's AI chips to China -- a prohibition that President Donald Trump has maintained on the company's most powerful processors. The Trump administration last year began loosening the ban on Nvidia's China sales for its lower-tier AI chips in exchange for a 15% commission paid to the U.S. government. But even with that concession, Nvidia still didn't factor in any China sales in the revenue forecast included in its most recent financial report released late last month. Yih-Shyan "Wally" Liaw, 71, a U.S. citizen and senior vice president and board member of Super Micro Computer, was arrested in California Thursday along with Ting-Wei "Willy" Sun, 44, a company contractor. Ruei-Tsang "Steven" Chang, a sales manager for the company in Taiwan, remains a fugitive, authorities said. Liaw, of Fremont, California, was released on bail while Sun, a citizen of Taiwan, was held for a bail hearing Friday. It was not immediately clear who represents them. The indictment said Liaw and Chang directed executives of a company in Southeast Asia to place orders for $2.5 billion worth of servers from the San Jose, California-based Super Micro Computer between 2024 and 2025. Authorities say the scheme became more brazen as time went on with at least $510 million worth of Super Micro Computer's servers being diverted to China after their assembly in the United States. The court papers did not identify the company, but Super Micro Computer Inc. issued a statement late Thursday in which it identified how the men who were arrested were affiliated with the company. "The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," the company said. "Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations." The company, noting it was not indicted, also said it "has been cooperating fully with the government's investigation and will continue to do so." In a release, Nvidia said "strict compliance is a top priority for Nvidia." "We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board -- NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective," the company said. Nvidia's processors have emerged as indispensable building blocks for the data centers that power artificial intelligence -- a potentially game-changing technology that could reshape society and change the balance of power in the world. For that reason, the U.S. and China are dueling to gain the upper hand in AI, evoking memories of the arms race between the U.S. and Germany to develop the first nuclear bomb during World War II. Even without sales to China, Nvidia's fortunes have soared during a three-year trajectory that has seen its market value rise from about $400 billion at the end of 2022 to $4.3 trillion today -- more than any other company in the world. Earlier this week, Nvidia CEO Jensen Huang signaled the AI boom will continue by predicting it will soon have a $1 trillion backlog in chip orders, doubling from his estimate a year ago. ___ Associated Press Writer Michael Liedtke reported from San Francisco.

U.S. tech execs smuggled Nvidia chips to China, prosecutors say

NVIDIA AI Computing Card captured in Hangzhou, Zhejiang Province, China on Dec. 9, 2025. The U.S. Attorney's Office for the Southern District of New York on Thursday charged people associated with a U.S. server maker with illegally diverting billions of dollars in artificial intelligence servers to China. The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as U.S. companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals. In an indictment filed with the U.S. District Court for the Southern District of New York, the U.S. government alleged that Yih-Shyan "Wally" Liaw, Ruei-Tsan "Steven" Chang and Ting-Wei "Willy" Sun worked together to violate the Export Control Reform Act. Nvidia's graphics processing units have been in demand across the world for training generative AI models. The server company's products containing Nvidia chips "are subject to strict U.S. export controls barring their sale to China without a license," the plaintiff said in the indictment. "Those controls are in place to protect U.S. national security and foreign policy interests, among other things." U.S. President Donald Trump initially sought to prevent China from obtaining the processors. But in December he said he told China's President Xi Pinging that the U.S. would permit Nvidia to ship H200 GPUs to China, "under conditions that allow for continued strong National Security." Earlier this week Nvidia CEO Jensen Huang said the chipmaker is restarting manufacturing to fulfill H200 purchase orders from China. Last summer, Nvidia had received licenses to export the H20 chip to China, with Huang agreeing to provide the U.S. with 15% of its sales in China.

U.S. Says 3 Tied to Silicon Valley Server Maker Broke Export Laws

Kalley Huang reported from San Francisco and Ana Swanson from Washington. Three men with ties to the Silicon Valley company Super Micro, including one of its co-founders, were charged with trying to transfer computer servers containing artificial intelligence chips made by Nvidia to China, a violation of export laws, according to a federal indictment unsealed on Thursday. Nvidia's computer chips are central to building and running artificial intelligence. Under both the Trump and Biden administrations, U.S. officials restricted the sales of the most advanced A.I. chips to China, fearing they would help Beijing develop new weaponry and surveillance systems, launch cyberattacks and make faster decisions on the battlefield. Prosecutors accused Yih-Shyan Liaw, a co-founder and board member of Super Micro; Ruei-Tsang Chang, a sales manager for the company in Taiwan; and Ting-Wei Sun, a contractor for the company, of "a systematic scheme to divert massive quantities of U.S. artificial intelligence technology to customers in China." Starting as early as 2024, Mr. Liaw and Mr. Chang directed an unnamed company in Southeast Asia to place purchase orders with Super Micro for servers with Nvidia's chips, according to the indictment from the U.S. attorney's office for the Southern District of New York. That company bought about $2.5 billion worth of servers from Super Micro. The defendants then staged thousands of replicas of the servers for Super Micro's compliance team and the Commerce Department to inspect, according to the indictment. In one instance, it said, Mr. Sun used a hair dryer to remove labels from the actual servers and attach them to the fake servers. Super Micro's actual servers had already been shipped to China, the indictment said. Prosecutors said that, between April and May last year, at least $510 million worth of the company's servers were sold to the unnamed company and then transferred to China.

Trio charged over alleged plot to smuggle Nvidia chips from US to China

A trio linked with a US technology supplier have been charged over a ploy to smuggle American artificial intelligence (AI) chips to China, the Department of Justice said on Thursday. The individuals allegedly "conspired to sell billions of dollars'" worth of technology to buyers in China by faking documents and using dummy equipment to slip past audits, according to the DOJ. The goods in question included Nvidia-made semiconductors, highly coveted AI chips which are subject to export controls. In August 2025, two Chinese nationals were also arrested and charged with illegally shipping millions of dollars' worth of Nvidia chips to China. The DOJ said in a statement on Thursday that it had arrested US-citizen Yih-Shyan "Wally" Liaw and Taiwanese citizen Ting-Wei "Willy" Sun, while Ruei-Tsang "Steven" Chang, a Taiwanese citizen, remains a fugitive. Liaw is the co-founder of California-based Super Micro Computer, a publicly traded firm that builds servers and supplies tech equipment for clients. In a statement on Thursday, Super Micro said it was cooperating fully with the investigation and noted that the firm was not named as a defendant in the case - though it confirmed that the three individuals were associated with the company. Super Micro said it had placed Liaw, the firm's Senior Vice President of Business Development, and Chang, a sales manager, on leave. It also said it had terminated ties with Sun, who was a contractor. "The conduct by these individuals alleged in the indictment is a contravention of the company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," the firm said. Neither court documents nor the DOJ named Super Micro as the trio's employers. Court documents said only that they worked for the same US manufacturer, and that that manufacturer worked with high-end computer chips, including those designed by Nvidia. Nvidia's semiconductors are highly regarded in the AI industry, with most of its advanced chips subject to US export controls that block their sale to China without a license, due to national security and foreign policy concerns. A spokesperson for Nvidia told the BBC the firm works closely with its customers and the government on compliance programs. "Unlawful diversion of controlled US computers to China is a losing proposition across the board," said the spokesperson. "Nvidia does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective." The US government, which initially sought to stop Beijing from obtaining Nvidia's advanced processors, said in December that they would allow the company to export some of its chips to China. The DOJ alleged that the trio devised a plan with an unnamed South East Asia-based firm to divert US-made chips to brokers in China who were in close contact with Liaw and Chang. The unnamed firm, referred to by the DOJ as Company-1, would allegedly place orders for servers, some of which contained Nvidia chips. Company-1 and the trio would then allegedly fabricate records to make it appear as though Company-1 was the intended user. But instead, Company-1 would repackage the servers with the help of a separate logistics firm and conceal them in unmarked boxes before shipping them to China, the DOJ said. The trio allegedly used thousands of "dummy" replica servers designed to resemble the US-purchased machines to slip past audits, while the real servers had already been illegally shipped, said the DOJ. The department said Sun, the contractor, would use hair dryers to remove and stick labels and serial number tags to the server boxes and dummy servers, which were captured on surveillance cameras. Company-1 is believed to have bought around $2.5bn (£1.86bn) worth of equipment and sent "massive quantities of servers with controlled US artificial intelligence technology" to China, said the DOJ. The department said that at no point did the defendants or the US manufacturer have a licence from the government to export American-made servers to China. In a separate case, two Chinese nationals were arrested and charged over illegally smuggling restricted AI chips to China. The two allegedly sent goods from the US to shipping firms in Malaysia and Singapore between 2022 and 2025, before diverting them to companies based in Hong Kong and mainland China. Their company, ALX Solutions, allegedly told their supplier, Super Micro, that the ordered chips were for a Singapore-based customer.

Supermicro's co-founder was just accused of smuggling $2.5 billion in GPUs to China | Fortune

Federal agents on Thursday arrested Yih-Shyan "Wally" Liaw, a prominent Silicon Valley executive deep in the AI ecosystem who co-founded Supermicro in 1993 and is a close confidante of CEO and chairman Charles Liang. According to a stunning release from the Department of Justice, an indictment was unsealed in Manhattan federal court on Thursday charging Liaw, 71, and two others with allegedly working in secret to divert billions in Supermicro AI servers to China in violation of U.S. export control laws. The two alleged co-conspirators charged alongside Liaw include Supermicro's Taiwan general manager Ruei-Tsang "Steven" Chang, who remains a fugitive, and a third-party fixer named Ting-Wei "Willy" Sun, who was also taken into custody on Thursday. The DOJ claims during 2024 and 2025, Liaw took a direct hand in the alleged conspiracy, working with Chang to allegedly find Chinese buyers who wanted the servers, which are packed with highly coveted GPU chips. The pipeline they allegedly constructed worked this way: Liaw and Chang would allegedly direct executives at an unnamed Southeast Asian company to place purchase orders with Supermicro as though they were destined for that company's operations. The servers would then get assembled in the U.S., shipped to Supermicro's facilities in Taiwan, and then delivered to the Southeast Asian company at a different location. From there, the Southeast Asian company, in tandem Liaw and Chang, would hand the servers off to a shipping and logistics company, which would allegedly get rid of the identifying packaging. They would allegedly put the servers in unmarked boxes before sending them to their true destination, which was China. To keep the clandestine scheme from raising red flags with Supermicro's compliance team, the defendants and the Southeast Asian company executives would fake documents and send false communications meant to show that the Southeast Asian company was the legitimate end buyer. During the two-year period, that company purchased about $2.5 billion worth of Supermicro servers under the alleged arrangement. The operation eventually grew even more "brazen," authorities claim. The DOJ alleges that during a three-week period from late April to mid-May 2025, about half a billion worth of servers assembled in the U.S. were shipped to China as part of the alleged conspiracy. To keep it under wraps, the defendants allegedly staged thousands of fake dummy servers -- actual, physical replicas of Supermicro's actual products, authorities claim -- at the warehouse where the Southeast Asian company was supposed to be storing its purchases. In reality, the real servers were long gone and had allegedly been shipped to China already. The DOJ claims surveillance cameras filmed Sun and an unnamed co-conspirator unboxing the fake servers, using a hair dryer to remove and reapply serial-number stickers and labels onto the dummy server boxes, then carefully repackaging them to pass inspection. The same phony servers were later used again to fool an audit conducted by the U.S. Department of Commerce, the DOJ alleges. Throughout the scheme, the defendants allegedly used encrypted messaging apps to discuss server quantities, delivery locations in China, and ways of keeping the operation hidden from Supermicro's compliance team and U.S. authorities. The DOJ does not name the company that manufactured the chips in the Supermicro servers, but Liang has often touted his close business ties to Nvidia and its CEO Jensen Huang. An Nvidia spokesperson did not comment on whether the GPUs were Nvidia's. The spokesperson said compliance is a "top priority" for the $4 trillion chipmaker. "We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board -- Nvidia does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective." In a statement, Supermicro said it is not a defendant in the indictment and that Liaw, who serves as a board member and as senior vice president of business development, has been placed on administrative leave. Chang has also been placed on leave, and Sun, who is at large, was fired from his contracting role. Supermicro said it is cooperating with the government investigation. "The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," the statement says. "Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations." Authorities claim the scheme was all engineered to make money from Chinese buyers and thwart the export controls. "The indictment unsealed today details alleged efforts to evade U.S. export laws through false documents, staged dummy servers to mislead inspectors, and convoluted transshipment schemes, in order to obfuscate the true destination of restricted AI technology -- China," said John A. Eisenberg, Assistant Attorney General for National Security. The stream of compliance and governance issues leading up to Liaw's stunning arrest all point to mounting problems with controls at the hardware manufacturer. The Backstory Trading in Supermicro's stock was suspended in 2018, after the company fell out of compliance with Nasdaq listing standards while the Securities & Exchange Commission conducted an investigation into its accounting practices. That same year, Liaw resigned all his positions with the company following a related internal audit committee investigation. In 2020, the company was ordered to pay a $17.5 million penalty and its chief financial officer resigned. Liaw returned to the fold in May 2021 as an adviser to Supermicro in "business development." He returned to a full-time senior executive post in August 2022 and in December 2023, he rejoined the board. Supermicro again faced the heat in August 2024 when short-seller Hindenburg took a position in the stock and published a scathing report on the company, alleging that the accounting issues had returned. Supermicro denied Hindenburg's allegations. However, around the same time, Supermicro's auditor Ernst & Young sent a letter to the board's audit committee flagging concerns about governance, transparency, and raising questions about whether the annual report could be filed on time. The board responded by appointing a special committee and bringing in Cooley LLP and forensic accounting firm Secretariat Advisors to investigate -- again. Then in October 2024, in the middle of an audit, EY abruptly resigned and its language pulled no punches. EY said it could "no longer rely on management's and the Audit Committee's representations" and was "unwilling to be associated with the financial statements prepared by management." The resignation set off a chain reaction. Without an auditor, Supermicro couldn't file its annual report for fiscal 2024 or its quarterly reports. Nasdaq gave the company a grace period until November, but it was at risk of a second trading suspension in six years. Days before the November deadline, Supermicro announced that it had hired BDO USA as its replacement auditor and submitted a compliance plan to Nasdaq that put it in better standing with the exchange. In December 2024, the special committee that investigated EY's allegations -- made up of a single board member -- concluded there was no evidence of fraud or misconduct and said EY's decision to resign was "not supported by facts." Liang declared the company was out of the woods and CFO David Weigand called the investigation a "distraction." However, the committee's report found lapses that it blamed on Weigand and recommended replacing him. Supermicro pledged to implement the committee's recommendations "immediately." That was 15 months ago. Weigand remains the CFO of Supermicro. "No one wants this job -- this is like touching lightning," Shawn Cole, president of executive search firm Cowen Partners, told Fortune last month, describing Supermicro's prolonged CFO search. Thursday's news is unlikely to aid in recruitment. Meanwhile, Supermicro is a key infrastructure company in the massive $700 billion AI buildout. Its servers are packed with Nvidia GPUs and it claims its proprietary liquid-cooling technology keeps the chips running efficiently as workloads increase. Liang helped Elon Musk build his Colossus AI cluster in just 122 days. Its most recent earnings call, the CEO flagged $13 billion in orders for an Nvidia Blackwell product line. Indeed, the export controls that Liaw, Chang, and Sun are accused of violating exist specifically because the Biden and Trump Administrations have been determined to keep advanced AI accelerators as a strategic national security asset that can't be sold to Beijing. The export controls, imposed by the Department of Commerce's Bureau of Industry and Security on advanced computing chips and on computers and devices that contain the chips, have been in place since October 2022. Each of the three face up to 20 years in prison on the most serious charge, conspiracy to violate the Export Controls Reform Act, and additional counts of conspiracy to smuggle goods and defraud the U.S. "As alleged in the indictment, the defendants participated in a systematic scheme to divert massive quantities of servers housing U.S. artificial intelligence technology to customers in China," said U.S. Attorney Jay Clayton for the Southern District of New York. "They did so through a tangled web of lies, obfuscation, and concealment -- all to drive sales and generate revenues in violation of U.S. law. Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security." Liaw has been a close confidante of Liang and his wife, Sara Liu, who all co-founded the company together, for years. While other companies are not named in the indictment, Supermicro has extensive overseas operations built around close family ties to the founding couple. The web of business relationships has long drawn scrutiny from investors, short sellers, and regulators. According to the company's disclosures, two Taiwan-based companies, Ablecom Technology and Compuware Technology, collectively received about $983 million in payments from Supermicro over the past three fiscal years. Both share a home with Supermicro's own Taiwan manufacturing facility in what is called "Supermicro AI Technology Park" in the Taoyuan area. Ablecom was founded in 1997, just four years after Supermicro, and is run by Jianfa "Steve" Liang, who is Charles Liang's little brother. Steve Liang is Ablecom's CEO and largest shareholder. Charles Liang and Sara Liu, who is also a board member and senior vice president at Supermicro, together own about 10.5% of Ablecom's stock, according to Supermicro's most recent 10-K. Compuware, founded in 2004 and described by Supermicro as an affiliate of Ablecom, is run by Jianda "Bill" Liang, another of Charles Liang's younger brothers. Steve Liang is also a director and shareholder of Compuware. Ablecom holds a 15% stake in Compuware. Liaw, who holds a 2.6% stake in Supermicro, is one of the company's largest individual shareholders outside of the Liang-Liu family, which controls about 13.4% of Supermicro's stock. A sibling of Liaw's owns about 11.7% of Ablecom's stock and 8.7% of Compuware's stock.

Three men charged with illegally smuggling advanced AI chips into China

Three people affiliated with server maker Supermicro were charged Thursday in connection with allegations they conspired to smuggle advanced Nvidia chips into China, in violation of U.S. export controls barring their sale to China without a license. The indictment from the U.S. Attorney for the Southern District of New York alleges that Wally Liaw, Steven Chang, and Willy Sun conspired to sell $2.5 billion worth of servers to a company based in Southeast Asia, which then repackaged the boxes to send $510 million worth of servers with banned chips to final destinations in China. The Department of Justice said Liaw, a U.S. citizen who co-founded Supermicro, and Sun, a citizen of Taiwan, were arrested today while Chang, also a citizen of Taiwan, remains a fugitive. The three men are each charged with a count of conspiring to violate the Export Controls Reform Act, carrying a maximum prison term of 20 years, if convicted. The three also each face one count of conspiring to smuggle goods and one count of conspiring to defraud the United States, each count carrying a maximum prison term of five years. In 2022, the U.S. tightened its export controls on selling advanced artificial intelligence chips to China, citing national security national security concerns. The bans covered Nvidia's B200 and H200 graphics processing units, among the company's most advanced AI chips, and only allowed sales to China through a license granted by the government. The three men are charged with selling servers, without a license, to China that included B200 and H200 GPUs. "They did so through a tangled web of lies, obfuscation, and concealment -- all to drive sales and generate revenues in violation of U.S. law," said U.S. Attorney Jay Clayton. "Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security." Chang and Liaw did not immediately respond to a request for comment sent via email. Contact information couldn't be found for Sun. It was not immediately clear if the men had attorneys who could speak on their behalf. Liaw, 71, co-founded Supermicro in 1993, and serves as a senior vice president of business development and a member of the company's board of directors. Chang, 53, is a sales manager based out of the company's Taiwan office, and Sun, 44, is described in the indictment as a "third-party broker and 'fixer'" who worked with the other two. Supermicro was not named in the indictment, but the company confirmed the roles of the three individuals. In a statement, the company said the two employees are on administrative leave and the relationship with the contractor has been terminated, effective immediately. "The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations. Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations," the company said in a statement to NBC News. Supermicro added it is "cooperating fully" with the government's investigation. In a statement, Nvidia said strict compliance is a "top priority," adding that it is working with customers and the government on compliance programs. "Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board -- NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective," an Nvidia spokesperson said. The alleged scheme comes amid concerns that banned chips are slipping into China, oftentimes "transshipping" to China through nearby countries like those in Southeast Asia. A Financial Times report from last July estimated that China was able to secure about $1 billion in advanced AI processors in the three months after President Donald Trump tightened export controls. Chris McGuire, a senior fellow for China and emerging technologies at the Council on Foreign Relations, said the indictment shows that the government should more closely look at the "glaring loopholes" of exporting through Southeast Asia. "This operation is further evidence that China is aggressively stealing U.S. technology to help power its AI industry -- which is unsurprising, given U.S. AI chips are far superior to any chips the Chinese can make," Mcguire said. More recently, the Trump administration has warmed up to allowing limited chip sales to China. In August, the White House agreed to let Nvidia sell its more limited H20 chips to China on the condition that it would share 15% of chip sales with the U.S. government. Earlier this year, Nvidia CEO Jensen Huang said sales of small amounts of H200 products for China-based customers were approved by the U.S. government.

Three charged with sneaking Nvidia AI chips from US into China

New York (AFP) - Employees of a US computer company raked in billions of dollars diverting Nvidia artificial intelligence chips to China in violation of export controls, according to an indictment unsealed Thursday. Yih-Shyan "Wally" Liaw, 71, of Silicon Valley conspired with 53-year-old Ruei-Tsang "Steven" Chang and 44-year-old Ting-Wei "Willy" Sun of Taiwan to smuggle computer servers containing high-performance Nvidia graphics processing units (GPUs) to China, prosecutors contend. "The defendants participated in a systematic scheme to divert massive quantities of US artificial intelligence technology to customers in China," US attorney Jay Clayton said in a statement. "They did so through a tangled web of lies, obfuscation, and concealment." The company that employed the three defendants, Super Micro Computer, said the employees violated its policies and controls with the scheme. Yih-Shyan Liaw was a senior vice president of business development and on the company's board of directors, Ruei-Tsang Chang was a sales manager in Taiwan, and Ting-Wei Sun was a contractor, according to Super Micro. "The company has been cooperating fully with the government's investigation and will continue to do so," it said. The trio conspired with others starting about two years ago for the sale of at least $2.5 billion worth of computer servers routed to China despite US export controls barring their sale in that country without proper licenses, according to the indictment. The scheme involved a "pass-through" company based in Southeast Asia used to obscure where the servers packed with Nvidia GPUs were actually going, prosecutors maintain. Falsified documents were used to hide the trail to China, and non-working "dummy" replica servers were kept in stock to fool auditors, according to the indictment. Ting-Wei Sun was described in the filing as a "fixer" who worked with others to conceal the scheme.

3 men are charged with conspiring to smuggle US artificial intelligence to China

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. export controls laws by scheming to divert massive quantities of the high-performance servers assembled in the United States to China between 2024 and 2025, according to the indictment in Manhattan federal court. In a release, FBI Assistant Director in Charge James C. Barnacle Jr. said the defendants used fabricated documents, staged bogus equipment to pass audit inventories and utilized a pass-through company to conceal their misconduct and true clientele list. U.S. Attorney Jay Clayton said schemes such as this "pose a direct threat to U.S. national security." Nvidia's processors have emerged as indispensable building blocks for the data centers that power artificial intelligence -- a potentially game-changing technology that could reshape society and change the balance of power in the world. For that reason, the U.S. and China are dueling to gain the upper hand in AI, evoking memories of the arms race between the U.S. and Germany to develop the first nuclear bomb during World War II. To help gain the upper hand, President Joe Biden's put restrictions on the sale of Nvidia's AI chips to China -- a prohibition that President Donald Trump has maintained on the company's most powerful processors. The Trump administration last year began loosening the ban on Nvidia's China sales for its lower-tier AI chips in exchange for a 15% commission paid to the U.S. government. But even with that concession, Nvidia still didn't factor in any China sales in the revenue forecast included in its most recent financial report released late last month. Yih-Shyan "Wally" Liaw, 71, a U.S. citizen and senior vice president and board member of Super Micro Computer, was arrested in California Thursday along with Ting-Wei "Willy" Sun, 44, a company contractor. Ruei-Tsang "Steven" Chang, a sales manager for the company in Taiwan, remains a fugitive, authorities said. Liaw, of Fremont, California, was released on bail while Sun, a citizen of Taiwan, was held for a bail hearing Friday. It was not immediately clear who represents them. The indictment said Liaw and Chang directed executives of a company in Southeast Asia to place orders for $2.5 billion worth of servers from the San Jose, California-based Super Micro Computer between 2024 and 2025. Authorities say the scheme became more brazen as time went on with at least $510 million worth of Super Micro Computer's servers being diverted to China after their assembly in the United States. The court papers did not identify the company, but Super Micro Computer Inc. issued a statement late Thursday in which it identified how the men who were arrested were affiliated with the company. "The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," the company said. "Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations." The company, noting it was not indicted, also said it "has been cooperating fully with the government's investigation and will continue to do so." In a release, Nvidia said "strict compliance is a top priority for Nvidia." "We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board -- NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective," the company said. Nvidia's processors have emerged as indispensable building blocks for the data centers that power artificial intelligence -- a potentially game-changing technology that could reshape society and change the balance of power in the world. For that reason, the U.S. and China are dueling to gain the upper hand in AI, evoking memories of the arms race between the U.S. and Germany to develop the first nuclear bomb during World War II. Even without sales to China, Nvidia's fortunes have soared during a three-year trajectory that has seen its market value rise from about $400 billion at the end of 2022 to $4.3 trillion today -- more than any other company in the world. Earlier this week, Nvidia CEO Jensen Huang signaled the AI boom will continue by predicting it will soon have a $1 trillion backlog in chip orders, doubling from his estimate a year ago. ___ Associated Press Writer Michael Liedtke reported from San Francisco.

Super Micro Cofounder Charged for Allegedly Funnelling AI Servers to China

US authorities say they have charged and arrested Supermicro co-founder Yih-Shyan "Wally" Liaw for allegedly funnelling $2.5 billion in AI servers to China through shell companies. US authorities say the co-founder of Super Micro Computer, Inc. has been charged and arrested over an alleged multi-billion dollar scheme to smuggle advanced artificial intelligence chips from the US to China. The Justice Department said in a statement on Thursday that it had unsealed an indictment charging Yih-Shyan "Wally" Liaw, as well as Super Micro sales executives Ruei-Tsang "Steven" Chang, and Ting-Wei "Willy" Sun over the alleged conspiracy. Prosecutors said the trio violated US export control laws by conspiring "to sell billions of dollars' worth of servers integrating sensitive, controlled graphic processing units to buyers in China." Super Micro, which was not charged, is a $18.5 billion California-based tech company specializing in high-performance server and data center hardware for large-scale companies such as IBM. Its infrastructure partners include firms like Nvidia and Google. The Justice Department said the alleged scheme involved the trio using a range of concealment techniques to hide the sale of around $2.5 billion worth of servers to a company in China across 2024 and 2025, with $510 million worth of sales occurring between April and May 2025 alone. "These defendants allegedly fabricated documents, staged bogus equipment to pass audit inventories, and used a pass-through company to conceal their misconduct and true clientele list," said James Barnacle, Jr., FBI assistant director in charge of the New York Field Office. Liaw and Sun have been arrested and will stand before a judge in the Northern District of California. Meanwhile, the Justice Department said that Chang, a Taiwanese citizen based outside the US, "remains a fugitive." In a statement shared with Cointelegraph, Super Micro distanced itself from the trio and labeled the alleged actions as a "contravention of the Company's policies and compliance controls." Related: DOJ and Europol take down SocksEscort network tied to crypto fraud "The company has been cooperating fully with the government's investigation and will continue to do so. Supermicro has not been named as a defendant in the indictment," a company spokesperson said. Super Micro's stock had initially gained during regular trading hours on Thursday. Following the Justice Department's announcement, the stock has since dropped 13.25% to $26.71 in after-hours trading.

3 Men Are Charged With Conspiring to Smuggle US Artificial Intelligence to China

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. export controls laws by scheming to divert massive quantities of the high-performance servers assembled in the United States to China between 2024 and 2025, according to the indictment in Manhattan federal court. In a release, FBI Assistant Director in Charge James C. Barnacle Jr. said the defendants used fabricated documents, staged bogus equipment to pass audit inventories and utilized a pass-through company to conceal their misconduct and true clientele list. U.S. Attorney Jay Clayton said schemes such as this "pose a direct threat to U.S. national security." Nvidia's processors have emerged as indispensable building blocks for the data centers that power artificial intelligence -- a potentially game-changing technology that could reshape society and change the balance of power in the world. For that reason, the U.S. and China are dueling to gain the upper hand in AI, evoking memories of the arms race between the U.S. and Germany to develop the first nuclear bomb during World War II. To help gain the upper hand, President Joe Biden's put restrictions on the sale of Nvidia's AI chips to China -- a prohibition that President Donald Trump has maintained on the company's most powerful processors. The Trump administration last year began loosening the ban on Nvidia's China sales for its lower-tier AI chips in exchange for a 15% commission paid to the U.S. government. But even with that concession, Nvidia still didn't factor in any China sales in the revenue forecast included in its most recent financial report released late last month. Yih-Shyan "Wally" Liaw, 71, a U.S. citizen and senior vice president and board member of Super Micro Computer, was arrested in California Thursday along with Ting-Wei "Willy" Sun, 44, a company contractor. Ruei-Tsang "Steven" Chang, a sales manager for the company in Taiwan, remains a fugitive, authorities said. Liaw, of Fremont, California, was released on bail while Sun, a citizen of Taiwan, was held for a bail hearing Friday. It was not immediately clear who represents them. The indictment said Liaw and Chang directed executives of a company in Southeast Asia to place orders for $2.5 billion worth of servers from the San Jose, California-based Super Micro Computer between 2024 and 2025. Authorities say the scheme became more brazen as time went on with at least $510 million worth of Super Micro Computer's servers being diverted to China after their assembly in the United States. The court papers did not identify the company, but Super Micro Computer Inc. issued a statement late Thursday in which it identified how the men who were arrested were affiliated with the company. "The conduct by these individuals alleged in the indictment is a contravention of the Company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," the company said. "Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations." The company, noting it was not indicted, also said it "has been cooperating fully with the government's investigation and will continue to do so." In a release, Nvidia said "strict compliance is a top priority for Nvidia." "We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board -- NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective," the company said. Nvidia's processors have emerged as indispensable building blocks for the data centers that power artificial intelligence -- a potentially game-changing technology that could reshape society and change the balance of power in the world. For that reason, the U.S. and China are dueling to gain the upper hand in AI, evoking memories of the arms race between the U.S. and Germany to develop the first nuclear bomb during World War II. Even without sales to China, Nvidia's fortunes have soared during a three-year trajectory that has seen its market value rise from about $400 billion at the end of 2022 to $4.3 trillion today -- more than any other company in the world. Earlier this week, Nvidia CEO Jensen Huang signaled the AI boom will continue by predicting it will soon have a $1 trillion backlog in chip orders, doubling from his estimate a year ago. ___ Associated Press Writer Michael Liedtke reported from San Francisco.

US charges 3 tied to Super Micro Computer with helping smuggle billions of dollars of AI chips to China - The Economic Times

US prosecutors did not name Super Micro in the complaint, referring only to a "US manufacturer." San Jose, California-based Super Micro said it was informed by federal prosecutors of the indictment on Thursday. It noted that the company itself was not named as a defendant in the case and said it had cooperated with investigators.Three people associated with artificial intelligence server maker Super Micro Computer Inc, including its co-founder, were charged with helping smuggle at least $2.5 billion of US AI technology to China in violation of export laws, the U.S. Justice Department said on Thursday. US prosecutors did not name Super Micro in the complaint, referring only to a "US manufacturer." San Jose, California-based Super Micro said it was informed by federal prosecutors of the indictment on Thursday. It noted that the company itself was not named as a defendant in the case and said it had cooperated with investigators. The Justice Department said it had charged Yih-Shyan Liaw, Ruei-Tsang Chang, and ⁠Ting-Wei Sun ⁠in an indictment unsealed in federal court in Manhattan on Thursday, on allegations of a complex scheme to send US-made servers through Taiwan to other countries in Southeast Asia, where they were swapped into unmarked boxes and sent onward to China. The US has had export restrictions on China for advanced AI chips since 2022. Liaw co-founded Super Micro in 1993, and joined its board of directors in 2023. Chang was a sales manager in the Taiwan office of Super Micro, while Sun was a contractor. US officials allege the three took extensive measures to conceal their activity both from the U.S.-based makers of the servers and U.S. export control officials, even using hair dryers to remove labels and serial numbers from the real machines and placing them on dummy machines left behind after the real machines had been shipped to China. The company said it placed Liaw and Chang on leave and terminated its ties with Sun, who was a contractor, after being made aware of the charges on Thursday. Super Micro's shares fell 8% ⁠in after hours trading following the news. 'Brazen' scheme US officials also did not name which chips were involved in the alleged scheme, but Nvidia dominates the market for AI chips and its offerings command some of the highest prices. In a statement, Nvidia, which sells chips to Super Micro and other server makers, said that "strict compliance" with export laws is a top priority "We ⁠continue to work closely with our customers and the government on compliance programs as export regulations have expanded," an Nvidia spokesperson said. "Unlawful diversion of controlled US computers to China is a losing proposition across the board-NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective." Nvidia did not immediately respond to a question about whether the company was aware of the alleged smuggling activity. Reuters in 2024 reported that China acquired banned Nvidia chips in Super Micro servers, among others. Prosecutors said the alleged co-conspirators took servers that were assembled in the United States and shipped them to facilities in Taiwan, both locations where Super Micro has facilities. From there, prosecutors allege, the servers were sent to other countries in Southeast Asia, where they were put in unmarked boxes before being sent to China. Prosecutors allege the co-conspirators worked to deceive the U.S. manufacturer's compliance teams by staging thousands of "dummy" servers - non-working replicas of the actual computers - for inspection, when the real servers had been shipped to China. The DOJ said surveillance video showed workers using hair dryers to remove labels from the real servers and put them on dummy servers. "The defendants' scheme became more brazen over time and resulted in massive quantities of servers with controlled US artificial intelligence technology being sent to China," the Justice Department said in a statement, saying that more than half a billion dollars worth of servers were diverted to China between April 2025 and mid-May 2025. The DOJ said Liaw, a US citizen, and ⁠Sun, a citizen of Taiwan, were arrested on Thursday while Chang, a citizen of Taiwan, remains a fugitive. Liaw well known in Silicon Valley Liaw, in particular, was well-known in Silicon Valley, where Super Micro builds computers using chips from some of the region's biggest firms such as Nvidia, Intel and Advanced Micro Devices. According to postings on his LinkedIn profile, he actively welcomed customers to the company's headquarters and attended a groundbreaking ceremony for one of Micron Technology's new factories and met with Micron CEO Sanjay Mehrotra, according to photographs posted on LinkedIn. On Monday, Nvidia CEO Jensen Huang walked the floor of Nvidia's massive developer conference meeting and meeting executives from key partners such as Samsung Electronics Co Ltd and SK Hynix. When Huang stopped at Super Micro's booth to shake hands with Super Micro co-founder and CEO Charles Liang, Liaw was standing nearby, according to a photograph posted by Super Micro on social media platform X. Liaw did not respond to an emailed request for comment at his Super Micro address or a call at a phone number listed for him. "The conduct by these individuals alleged in the indictment is a contravention of the company's policies and compliance controls, including efforts to circumvent applicable export control laws and regulations," Super Micro said.

Three charged with sneaking Nvidia AI chips from US into China - VnExpress International

Yih-Shyan "Wally" Liaw, 71, of Silicon Valley conspired with 53-year-old Ruei-Tsang "Steven" Chang and 44-year-old Ting-Wei "Willy" Sun of Taiwan to smuggle computer servers containing high-performance Nvidia graphics processing units (GPUs) to China, prosecutors contend. "The defendants participated in a systematic scheme to divert massive quantities of U.S. artificial intelligence technology to customers in China," U.S. attorney Jay Clayton said in a statement. "They did so through a tangled web of lies, obfuscation, and concealment." The company that employed the three defendants, Super Micro Computer, said the employees violated its policies and controls with the scheme. Yih-Shyan Liaw was a senior vice president of business development and on the company's board of directors, Ruei-Tsang Chang was a sales manager in Taiwan, and Ting-Wei Sun was a contractor, according to Super Micro. "The company has been cooperating fully with the government's investigation and will continue to do so," it said. The trio conspired with others starting about two years ago for the sale of at least $2.5 billion worth of computer servers routed to China despite U.S. export controls barring their sale in that country without proper licenses, according to the indictment. The scheme involved a "pass-through" company based in Southeast Asia used to obscure where the servers packed with Nvidia GPUs were actually going, prosecutors maintain. Falsified documents were used to hide the trail to China, and non-working "dummy" replica servers were kept in stock to fool auditors, according to the indictment. Ting-Wei Sun was described in the filing as a "fixer" who worked with others to conceal the scheme.

US charges three people with conspiring to divert AI tech to China

WASHINGTON, March 19 (Reuters) - The U.S. Justice Department said on Thursday that three people have been charged with conspiring to unlawfully divert U.S. artificial intelligence technology to China. The FBI said Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun "allegedly conspired to sell billions of dollars worth of servers integrating sensitive, controlled graphic processing units to buyers in China, in violation of U.S. export control laws." (Reporting by Kanishka Singh in Washington, editing by Michelle Nichols)