Three men, including a senior vice president of Super Micro Computer Inc., have been charged with conspiring to smuggle computer servers containing advanced Nvidia chips to China.
The indictment, filed in Manhattan federal court, alleges that between 2024 and 2025, the defendants violated U.S. export control laws by planning to divert billions of dollars' worth of high-performance servers manufactured in the United States to China.
FBI Assistant Director in Charge James C. Barnacle Jr. stated that the defendants employed fabricated documents and staged equipment to manipulate audit inventories, using a pass-through company to hide their misconduct and actual clientele.
U.S. Attorney Jay Clayton emphasized that such schemes present a direct threat to national security.
Nvidia’s processors are vital for data centers that support artificial intelligence, a transformative technology with global implications. The competition between the U.S. and China for AI supremacy echoes the historical arms race for nuclear technology during World War II.
In response to these geopolitical tensions, President Joe Biden has imposed restrictions on the sale of Nvidia's AI chips to China. Former President Donald Trump previously maintained a ban on the company's most powerful processors, although the Trump administration had begun to ease restrictions on lower-tier AI chips in exchange for a 15% commission paid to the U.S. government. Despite this concession, Nvidia did not include any sales to China in its recent financial forecast.
The individuals charged include Yih-Shyan “Wally” Liaw, 71, a U.S. citizen and senior vice president at Super Micro, and Ting-Wei “Willy” Sun, 44, a contractor for the company. Ruei-Tsang “Steven” Chang, a sales manager in Taiwan, remains at large. Liaw was arrested in California and released on bail, while Sun, a Taiwanese citizen, was detained for a bail hearing.
The indictment reveals that Liaw and Chang instructed executives at a Southeast Asian company to purchase $2.5 billion worth of servers from Super Micro between 2024 and 2025.
Authorities noted that the scheme escalated, with at least $510 million in servers being diverted to China after assembly in the U.S.
Although the specific company involved was not named in the court documents, Super Micro Computer Inc. confirmed in a statement that the individuals arrested were affiliated with them.
The company remarked, “The conduct by these individuals alleged in the indictment contravenes the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations.” They further stated their commitment to adhering to U.S. export and re-export control laws.
Super Micro also clarified that it is not indicted and is cooperating fully with the government’s investigation.
Nvidia expressed its commitment to strict compliance with export regulations, stating, “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.”
Despite restrictions on sales to China, Nvidia has experienced significant financial growth, with its market value soaring from approximately $400 billion at the end of 2022 to $4.3 trillion today, making it the most valuable company globally.
Nvidia CEO Jensen Huang recently indicated that the demand for AI technology is robust, predicting a backlog of chip orders will reach $1 trillion, doubling from estimates made a year ago.
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Source: SecurityWeek News