Three people, including a co-founder of the U.S. server corporations Supermicro, have been indicted by U.S. federal prosecutors on charges of smuggling servers equipped with Nvidia's artificial intelligence (AI) chips to China.
On the 19th (local time), the U.S. Attorney's Office for the Southern District of New York said it indicted Yishyan Liao (Wally Liao), Ruei-Chang Chang (Steven Chang), and Ting-Wei Sun (Willy Sun) on charges of violating U.S. export control laws.
Of these, Liao (71), a U.S. citizen, and Sun (44), a Taiwan citizen, were arrested and appeared in the U.S. District Court for the Northern District of California, while Chang (53), a Taiwan citizen, remains at large.
Liao was reportedly released on bail that day, and Sun is scheduled to have a bail hearing on the 20th. Liao is a co-founder of Supermicro, a registered director, and senior vice president for business development. Chang served as sales manager at Supermicro's Taiwan office, and Sun is an outside broker and a subcontractor for Supermicro.
The three defendants are accused of attempting to smuggle high-performance computer servers assembled in the United States and containing U.S. AI technology to China via a Southeast Asian company.
Prosecutors believe they evaded detection by manipulating documents to pass audits and by setting up intermediary companies to place fake servers. They also said the group tried to conceal the list of real customers.
According to the prosecutors' announcement, from 2024 to 2025 they ordered $2.5 billion (3.7 trillion won) worth of servers, and at least $510 million (760 billion won) worth were diverted to China from late Apr. 2024 to mid-May 2025.
The U.S. Ministry of Justice and federal prosecutors did not disclose the name of the company involved, describing it only as a "publicly traded U.S. manufacturer." But Supermicro, headquartered in San Jose, California, issued a statement late that night. The company said it has fully cooperated with the government investigation and that the conduct of the defendants cited in the indictment violated company policy and compliance guidelines.
In this regard, Nvidia said in a press release that it always prioritizes compliance and explained that it does not provide service or support for systems illegally exported to China.