U.S. tech execs smuggled Nvidia chips to China, prosecutors say

The U.S. Attorney's Office for the Southern District of New York has charged people associated with a U.S. server maker with illegally diverting billions of dollars in artificial intelligence servers to China.

The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals.

In an indictment unsealed on Thursday, the U.S. government alleged that Yih-Shyan "Wally" Liaw, Ruei-Tsan "Steven" Chang and Ting-Wei "Willy" Sun worked together to violate the Export Control Reform Act.

Liaw is a co-founder of server maker Super Micro Computer and a member of its board of directors. He controls $464 million worth of Super Micro shares, according to FactSet. Liaw and Super Micro did not immediately respond to requests for comment.

A Southeast Asian company, acting as a middleman, compiled fake paperwork to appear as if it would be using the servers and had a separate logistics firm repackage the servers to conceal them before going to China, according to the indictment.

Nvidia's graphics processing units have been in demand across the world for training generative AI models.

The server company's products containing Nvidia chips "are subject to strict U.S. export controls barring their sale to China without a license," the plaintiff said in the indictment. "Those controls are in place to protect U.S. national security and foreign policy interests, among other things."

U.S. President Donald Trump initially sought to prevent China from obtaining the processors. But in December he said he told China's President Xi Pinging that the U.S. would permit Nvidia to ship H200 GPUs to China, "under conditions that allow for continued strong National Security." Earlier this week Nvidia CEO Jensen Huang said the chipmaker is restarting manufacturing to fulfill H200 purchase orders from China.

Last summer, Nvidia had received licenses to export the H20 chip to China, with Huang agreeing to provide the U.S. with 15% of its sales in China.

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