A Super Micro Computer founder diverted $2.5 billion worth of Nvidia chips to China, feds say

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 -1.02% artificial intelligence technology to China. Jay Clayton, the U.S. Attorney for the Southern District of New York, announced the indictment Thursday, saying the group violated export control laws.

The Department of Justice charged Yih-Shyan “Wally” Liaw, 71; Ruei-Tsang “Steven” Chang, 53; and Ting-Wei “Willy” Sun, 44. Liaw, who helped start Super Micro and held a seat on its board, was taken into custody in California before being granted bail. Sun, a broker, is in custody. Chang, a general manager in the Taiwan office of Super Micro, remains a fugitive, authorities said.

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According to CNN, the group utilized an intermediary firm located in Southeast Asia during 2024 and 2025 to procure servers produced in the U.S. The indictment says these servers contained graphics processing units that require a license for export to China. The hardware was transported in plain packaging via a shipping firm to obscure what was inside the shipments as they headed to Chinese destinations.

“The defendants participated in a systematic scheme to divert massive quantities of U.S. artificial intelligence technology to customers in China,” Clayton said.  “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.  Crimes involving sensitive technology must be met with swift action otherwise the law is meaningless.

Prosecutors say the scheme resulted in the diversion of $510 million in hardware between April 2025 and May 2025. To bypass compliance measures, the defendants and executives at the pass-through firm prepared documents identifying the Southeast Asian company as the customer.

To manipulate audit results, the defendants allegedly set up thousands of non-operational imitation servers. The government says that Sun and an associate applied heat with hair dryers to transfer identification tags and serial numbers from legitimate packaging to the decoy units. Surveillance footage captured the group preparing these items to pass inspections by Super Micro and the Department of Commerce.

Super Micro, which does not face charges in the case, issued a statement noting it had suspended Liaw and Chang from their duties. The manufacturer cut ties with Sun and said the actions described in the charges represent a violation of its internal rules. The manufacturer is cooperating with the investigation.

Super Micro Computer stock plummeted almost 25% in pre-market trading.

The three men are charged with planning to circumvent the Export Controls Reform Act, along with counts for conspiring to defraud the government and transport goods illegally. Neither the men charged nor lawyers representing them have yet to comment publicly.

The export control charge carries a maximum sentence of 20 years in prison.

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