A U.S. server maker company has suspended three employees after they were charged with illegally smuggling at least $2.5 billion worth of U.S. AI technology to China. An unsealed indictment provided complete details of the scam on Thursday in a federal court in Manhattan.
The group at Super Micro Computer is accused of helping send servers with powerful Nvidia chips to China, using fake equipment to manipulate an American inspector.
Yih-Shyan Liaw, Ruei-Tsang Chang, and Tiwana Citizen Ting-Wei Sun were named in the official complaint, and after this news, Super Micro’s stock price fell 20% on Friday, March 20.
While officials did not name the particular AI chips used in the scam, Nvidia is the main company in the AI chip market and supplies them to Super Micro. It gives several giant tech companies’ GPUs, like the Blackwell, which help power chatbots and other important applications.
According to Al Jazeera, in an official statement, officials from Nvidia said that “strict compliance” is one of the major priorities when it comes to export laws.
A spokesperson further added, “We continue to work closely with our customers and the government on compliance programmes as export regulations have expanded.”
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“Unlawful diversion of controlled US 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.”
According to sources, authorities at Super Micro said it put co-founder and Senior Vice President Yih-Shyan “Wally” Liaw on leave after learning about his alleged involvement in the scheme.
The San Jose-based tech company, which started in 1993, also put another employee on leave and fired a contractor. According to the complaint, between 2024 and 2025, the group bought about $2.5 billion in servers from the U.S. maker, most of them put together in the United States.
Between late April and mid-May 2025 alone, about $510 million worth of servers were sent to China against export laws. The AI servers were made in the United States, sent to Super Micro’s buildings in Taiwan, and then secretly shipped to customers.
The case is connected to one of the most sensitive and controversial areas in U.S.-China relations. The technological rivalry between the two nations has become nothing less than a competition.
The U.S. has stopped China from buying Nvidia’s most advanced AI chips to keep its lead in this area. However, some Chinese companies have said that a few countries have illegally tried to get around the restrictions and have started shipping through less developed countries.
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“This involved a tangled web of lies, obfuscation, and concealment—all to drive sales and generate revenues in violation of U.S. law,” said U.S. Attorney Jay Clayton from New York.
Federal Bureau of Investigation (FBI) Assistant Director in Charge James C. Barnacle, Jr. said that Liaw, Chang, and Sun allegedly conspired to sell billions of dollars’ worth of U.S.-made servers containing sensitive AI technology to buyers in China and had violated major export laws.
The three employees allegedly fabricated the paperwork and staged fake (dummy) servers to pass audits, and worked with a pass-through company to hide their misconduct and the actual list of clients.
“The FBI will hold accountable anyone who uses American companies to provide export-controlled technology to our adversaries,” the assistant director sternly told the media.
While these allegations have sparked a major concern about breach of company laws, data privacy and export laws, the case was investigated by the FBI, the Department of Commerce, and the Justice Department, and is being handled by prosecutors in New York.
If convicted, all three employees could face one count each of conspiring to violate the Export Controls Reform Act (maximum 20 years), conspiring to smuggle goods from the U.S. (maximum 5 years), and conspiring to defraud the United States (maximum 5 years).
