Super Micro shareholders sue over securities fraud as AI chip smuggling charges shake investor confidence
44 Sources
[1]
Super Micro shareholders sue company over securities fraud after AI chip smuggling bust -- furious investors say company concealed dependence on illicit sales to China
Investors are furious that Super Micro didn't tell them that a big chunk of its sales may have come from illegal sources. Super Micro Computer, Inc. is facing a lawsuit from some shareholders who claim the company failed to disclose its dependence on illegal Chinese sales, resulting in an inflated
[2]
Feds Arrest Trio for Nvidia GPU Smuggling Scheme Involving Supermicro Servers
The US has disclosed a new Nvidia chip-smuggling case that also seems to involve San Jose-based server manufacturer Supermicro. It comes days after a Supermicro co-founder was arrested in a separate investigation, but in this instance, it looks like Nvidia and Supermicro played a role in foiling
[3]
Three more charged with trying to smuggle GPUs to China
Prosecutors say trio used Thai front companies to reroute high-end AI servers The US has collared three more people for allegedly attempting to smuggle Nvidia GPUs to China, days after a Supermicro co-founder faced similar accusations. The Department of Justice charged Chinese national Stanley Yi
[4]
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
[5]
Super Micro co-founder Liaw resigns from board after US charge for smuggling AI chips to China
March 20 (Reuters) - Super Micro Computer (SMCI.O), opens new tab said on Friday that Yih-Shyan Liaw has resigned from its board, effective immediately, after the co-founder was charged with helping smuggle billions of dollars of AI chips to China. Shares of the artificial intelligence server
[6]
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
[7]
Three individuals charged with attempting to break US sanctions on AI chips -- damning text messages between conspirators reveal intention to find clients to 'act as pass through partner for customers in China'
Three people have been indicted with conspiring to commit smuggling and export control violations after it was revealed that they intended to order over $170 million worth of computer servers containing export-controlled chips made by a California-based company. According to the Department of
[8]
Supermicro Co-Founder Indicted in $2.5 Billion Nvidia GPU Smuggling Scheme
A co-founder of Supermicro, a major US server maker, has been indicted for allegedly supplying export-controlled Nvidia GPUs, including Blackwell chips, to China in return for billions in sales. On Thursday, the Justice Department announced it had indicted 71-year-old co-founder Wally Liaw, along
[9]
Super Micro co-founder indicted on Nvidia smuggling charges leaves board
Super Micro Computer said Friday that Yih-Shyan "Wally" Liaw, a co-founder, has resigned from the server maker's board after he was indicted in the U.S. on allegations of smuggling equipment containing Nvidia artificial intelligence chips into China. A federal court unsealed the indictment on
[10]
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
[11]
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
[12]
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
[13]
Super Micro Co-Founder Charged With Smuggling $2.5 Billion of AI Tech Into China
Co-Founder and Vice President Yih-Shyan Liaw could face up to 30 years in prison. An executive at Super Micro Computer was arrested Thursday for allegedly smuggling servers with advanced AI chips into China. The U.S. Department of Justice unsealed an indictment revealing that three people
[14]
Super Micro shares plunge as US charges co-founder, 2 more for smuggling AI chips to China
March 20 (Reuters) - Super Micro shares sank 27% on Friday after U.S. prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China. The drop in premarket trading would erase nearly $5 billion from Super
[15]
Super Micro shares plunge on shocking smuggling case. One stock stands to benefit
Super Micro Computer is tumbling amid a smuggling investigation into a member of its board of directors that could benefit one major AI server competitor, according to Wall Street Shares of Super Micro are heading for their worst one-day drop since 2024 on reports that its cofounder, a manager and
[16]
Super Micro employees accused of smuggling $2.5 billion worth of Nvidia hardware to China -- perps used a hairdryer to move serial numbers between real hardware and thousands of dummy servers
Trio of suspects could be in line for decades behind bars, fines, and asset forfeiture. Three Super Micro employees have been charged with conspiring to unlawfully divert cutting-edge U.S. artificial intelligence technology to China. An indictment unsealed on Thursday says Yih-Shyan "Wally" Liaw,
[17]
The biggest heist of the US-China Chip War: 3 Supermicro employees charged with conspiracy to smuggle restricted Nvidia H100, H200, and B200 chips to China - dummy boxes, fake labels, and a pass-through company enabled the $2.5 billion scheme
Three men are facing charges of conspiracy to smuggle restricted GPUs to China * Three men have been charged for exporting restricted AI chips to China * The men were employees of Super Micro Computer Inc. * The scheme amassed $2.5 billion in sales, circumventing restrictions on power AI GPUs A
[18]
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
[19]
Supermicro -- accused of smuggling $2.5 billion in Nvidia chips to China -- has been here before, in Iran | Fortune
Supermicro has spent the past three years riding the AI wave in Silicon Valley but before the recent allegations involving a co-founder smuggling Nvidia chips, it previously ran afoul of export-control regulations. The hardware manufacturer's co-founder, Yih-Shyan "Wally" Liaw, was charged on
[20]
Super Micro founder diverted $2.5 billion of Nvidia chips to China: feds
Federal authorities have charged a co-founder of Super Micro Computer and two other people for allegedly sending $2.5 billion in hardware equipped with Nvidia $NVDA artificial intelligence technology to China. Jay Clayton, the U.S. Attorney for the Southern District of New York, announced the
[21]
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
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The co-founder of a major datacenter company has been charged with smuggling $2.5 billion in AI chips to China
Supermicro has put them on administrative leave with another employee also charged, and a third has been fired. Three Chinese businessmen have been charged by the US government for allegedly diverting "high-performance computer servers assembled in the United States and integrating sophisticated
[23]
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
[24]
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
[25]
Super Micro Computer stock is collapsing today. Investors flee as DOJ charges cofounder in AI China scheme
Shares in Super Micro Computer (Nasdaq: SMCI) are falling off a cliff this morning after news that the U.S. Department of Justice (DOJ) has charged the company's cofounder and two other associates with conspiring to deliver restricted AI technology to China. On Thursday, the U.S. Attorney's Office
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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
[27]
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
[28]
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
[29]
Three charged in alleged plot to export AI chips to China
A co-founder of Super Micro Computer and two others have been charged with attempting to smuggle advanced AI chips to China in violation of U.S. export restrictions, according to the Department of Justice (DOJ). Yih-Shyan "Wally" Liaw, who served as a board member and senior vice president of
[30]
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
[31]
Co-Founder of Super Micro Arrested for Smuggling $2.5 Billion Worth of Nvidia Chips to China
Prosecutors say Wally Liaw and two associates used a "tangled web of lies" to smuggle banned AI chips through a Southeast Asian middleman. Did Wally Liaw break the law? The 71-year-old co-founder of server maker Super Micro was arrested Thursday for allegedly smuggling $2.5 billion of Nvidia AI
[32]
US stocks: Super Micro shares plunge 27% as co-founder, 2 others charged with smuggling AI chips to China
Super Micro shares sank 27% on Friday after U.S. prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China. Super Micro shares sank 27% on Friday after U.S. prosecutors charged three people linked
[33]
US Indicts Three In Second Nvidia AI Chip Smuggling Case Linked To Supermicro Servers
Nvidia tells CRN that the indictments show that 'that our due diligence process works well. Despite several efforts, the would-be smugglers failed to clear our diligence process and did not receive GPUs from us.' The U.S. Department of Justice has for a second time in two weeks indicted multiple
[34]
SuperMicro Allegedly Smuggled $2.5B in NVIDIA Chips to China With Fake Servers, and Somehow Thought Nobody Was Watching
SuperMicro, a leading AI infrastructure provider, has reportedly been charged by the Justice Department for smuggling NVIDIA's servers to China, but the way they did it is a lot more surprising. The issue of NVIDIA's AI chips being smuggled to China has been persistent since the Biden
[35]
DOJ Charges Spark 12% After-Hours Plunge In Super Micro Stock (SMCI) Over Alleged Illegal AI Exports To China - NVIDIA (NASDAQ:NVDA), Super Micro Computer (NASDAQ:SMCI)
On Thursday, shares of Super Micro Computer Inc. (NASDAQ:SMCI) fell about 11.85% after hours to $27.14, according to Benzinga Pro. DOJ Charges Spark Sell-Off In AI Server Stock The decline followed an announcement from the U.S. Department of Justice that three individuals were charged in an
[36]
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
[37]
Supermicro Co-Founder, Two Others Charged In Alleged Nvidia AI Chip Smuggling Operation
In a statement, Supermicro says it was informed of the indictment of the three individuals, and that the company itself was not named as a defendant in the indictment. A co-founder of server and storage giant Supermicro, along with an employee and a contractor of the company, this week were
[38]
Super Micro shares plunge as US charges co-founder, two more for smuggling AI chips to China
Super Micro shares sank 33% on Friday after US prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China. US prosecutors did not name Super Micro -- a major AI server builder using Nvidia's chips --
[39]
Super Micro Falls 27% After US Charges Co-Founder in China Chip Case
Super Micro Shares Plunge After US Charges Co-Founder in AI Server Smuggling Case Super Micro Computer shares fell about 27% on March 20 after US authorities charged three people tied to the company in an alleged scheme to send restricted AI servers to China. The indictment names co-founder
[40]
3 men charged with conspiring to smuggle AI to China
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
[41]
Super Micro's Liaw exits board following AI chip smuggling charges
March 20 (Reuters) - Super Micro Computer said on Friday that Yih-Shyan Liaw has resigned from its board, effective immediately, after the co-founder was arrested by the U.S. Justice Department for helping smuggle billions of dollars of AI chips to China. Shares of the artificial intelligence
[42]
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
[43]
Super Micro shares plunge as US charges co-founder, 2 more for smuggling AI chips to China
March 20 (Reuters) - Super Micro shares sank 27% on Friday after U.S. prosecutors charged three people linked with the company, including its co-founder, with helping smuggle billions of dollars worth of AI technology to China. The drop in premarket trading would erase nearly $5 billion from Super
[44]
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
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Super Micro faces a securities fraud lawsuit from shareholders who claim the company concealed its dependence on illegal Chinese sales. The lawsuit follows federal charges against co-founder Yih-Shyan Wally Liaw and two employees for allegedly smuggling $2.5 billion worth of AI servers to China, representing over 16% of the company's 2024 revenue. The revelations triggered a 33% stock plunge, erasing more than $6 billion in market value.
Super Micro Shareholders Sue Over Alleged Securities Fraud
Super Micro Computer, Inc. is now facing a securities fraud lawsuit from shareholders who allege the company deliberately concealed its dependence on illegal sales of AI chips to China, resulting in an artificially inflated stock price
1
. The Super Micro shareholders sue claiming the company failed to disclose issues with US export controls compliance, making its business outlook appear stronger than it actually was. This legal action comes in the wake of federal charges against three Super Micro employees, including co-founder Yih-Shyan Wally Liaw, for allegedly conspiring to smuggle cutting-edge artificial intelligence technology to China4
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Source: New York Post
AI Chip Smuggling Operation Generates $2.5 Billion in Sales
The Department of Justice alleges that these illegal exports of high-end Nvidia chips, including A100 and H100 models, delivered approximately $2.5 billion in sales for Super Micro in 2024, accounting for more than 16% of the company's total $14.94 billion in revenue that year
1
. The scheme involved shipping genuine high-performance computer servers to warehouses in Southeast Asia, where serial numbers were removed and switched to dummy servers to deceive inspectors. From there, the actual AI servers were sent to China through front companies with fabricated paperwork, demonstrating a deliberate and sophisticated operation .
Source: CRN
Stock Plunges 33% as Investor Confidence Collapses
The revelations triggered a massive 33% drop in Super Micro stock value, wiping out more than $6 billion for investors
1
. While federal authorities have not directly accused Super Micro of corporate wrongdoing, the fact that a substantial portion of its sales is tied to alleged illegal activity has severely damaged investor confidence. Following the charges, Liaw resigned from the company's board effective immediately, and Super Micro placed both Liaw and sales manager Ruei-Tsang Chang on administrative leave while terminating its relationship with contractor Ting-Wei Sun5
. The company appointed DeAnna Luna as acting chief compliance officer to address the crisis5
.Multiple Cases Reveal Nvidia GPU Smuggling Scheme Network
The Super Micro case is not isolated. The Department of Justice announced charges against three additional suspects in a separate Nvidia GPU smuggling scheme involving Supermicro servers. Chinese national Stanley Yi Zheng from Hong Kong and US citizens Matthew Kelly and Tommy Shad English allegedly conspired to smuggle export-controlled chips to China using pass-through companies in Thailand starting in May 2023
2
. Court documents reveal that Zheng sent a purchase order for 232 server units of model SYS-821GE-TNHR, which supports Nvidia H100 and H200 AI GPUs, totaling nearly $62 million2
. In this instance, both Nvidia and Super Micro appear to have noticed irregularities and canceled the orders in early 20242
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Source: New York Post
Circumventing US Export Controls Through Elaborate Schemes
The criminal complaint shows that when English attempted to order 750 servers worth approximately $170 million from Super Micro in October 2023, claiming to act on behalf of a Thai client, the company became suspicious when Zheng's China-based company was added to email threads while no one from the purported Thai customer was included
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. Text messages between the conspirators obtained by federal investigators discuss the market value of Nvidia's products in China and include references to finding clients who would "act as pass through partner for customers in China," demonstrating clear intent to circumvent US export controls1
.Related Stories
Black Market for AI GPUs Thrives Despite Enforcement
These prosecutions, alongside dozens of reports of AI chip smuggling from Singapore, Malaysia, Thailand, and other countries near China, reveal a thriving black market for AI GPUs
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. The uncertainty from Beijing has led some companies to consider purchasing these AI GPUs from illicit sources, especially as AI hyperscalers worldwide race to build the most advanced models possible. Two US senators, Jim Banks and Elizabeth Warren, have called on the Commerce Department to suspend Nvidia's export licenses to Asian markets over fears the hardware will be rerouted to mainland China2
. Nvidia stated that "strict compliance is a top priority" and emphasized that unlawful diversion of controlled US computers to China is "a losing proposition" as the company does not provide service or support for such systems2
.Super Micro Emphasizes Compliance Programs Amid Crisis
Super Micro has stated that the alleged conduct "is a contravention of the company's policies and compliance controls" and maintains it has "a robust compliance program" committed to full adherence to all applicable US export and re-export control laws and regulations
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. The company has been cooperating with the government's investigation and pledged to continue doing so. However, the securities fraud lawsuit suggests that shareholders believe the company's compliance programs failed to prevent or disclose the conspiracy, raising questions about the effectiveness of internal controls at a time when sanctions compliance has become critical for tech companies operating in the AI sector.References
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