- Three men have been charged with exporting restricted AI chips to China
- The men were employees of Super Micro Computer Inc.
- The scheme amassed $2.5 billion in sales, bypassing restrictions on power AI GPUs
A federal investigation has been launched after the US Department of Justice charged three people with allegedly smuggling restricted Nvidia AI chips into China.
The three men were not named in court documents, but a statement released by Super Micro Computer Inc. identified those involved.
The smuggling allegedly took place between 2024 and 2025, when billions of dollars worth of computer servers containing advanced Nvidia made the trip to China.
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The masterminds behind the $2.5 billion scheme
Of the three accused men, two have been arrested. Yih-Shyan “Wally” Liaw, a senior vice president and board member of Supermicro, was arrested in California, while Ting-Wei “Willy” Sun, a Supermicro contractor based in Taiwan, was also taken into custody. The third man, Ruei-Tsang “Steven” Chang, worked for Supermicro’s office in Taiwan and is currently on the run.
Supermicro issued a statement about the arrest of the three men. “The conduct of this individual alleged in the indictment is a violation of company 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 compliance with all applicable US export and re-export control laws and regulations.”
The smuggling scheme reportedly amassed $2.5 billion in sales, with the trio managing to divert over $510 million worth of Supermicro servers to China. The servers were allegedly ordered by a Southeast Asian “pass-through” company (listed in the indictment as Company-1) to appear as legitimate transactions before being repackaged and shipped to China.
Providing China with cutting-edge technology
The Supermicro servers featured mostly Nvidia H100 and H200 Tensor Core GPUs, which are specifically designed to train and handle large language models (LLMs).
The indictment further states that in order to keep China supplied with the latest technologies, Liaw allegedly pushed for Company-1 to place larger orders, including servers containing Nvidia’s B200 – one of the most advanced GPUs at the time.
The height of the US-China chip war
The US has had restrictions on the types of GPUs companies can export to China since October 2022. The primary purpose of these restrictions was to maintain US superiority in AI development, while preventing China from building powerful models that could be used for decryption, autonomous weapons systems and cyber warfare.
To monitor the enforcement of these restrictions, physical inspections took place to ensure that servers were not smuggled into China. However, the three individuals allegedly staged “dummy” servers packed with Supermicro’s labels and boxes, while the original contents of the same boxes were already shipped to China.
Bypass the limitations
As this case would attest, export restrictions are only as good as their physical inspections. Although the indictment does not explain the process of a physical inspection, it does say that an audit took place in August 2025. But the indictment further states that the person tasked with conducting the audit allegedly enjoyed entertainment paid for by Company-1.
To complete the audit, Sun reportedly sent photos and videos of the dummy servers, complete with their fake labels, to the auditor. The US Bureau of Industry and Security (BIS) later informed Supermicro that Company-1 was diverting its orders to China and another audit was planned. The second audit again involved dummy servers, and resulted in BIS placing a hold on Company-1’s shipments.
Since January 2026, restrictions on the export of H200 chips to China have been lifted, but customers are required to ensure “adequate security procedures”, with approved exports subject to a 25% levy. However, B200 chips remain strictly prohibited.
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