Federal authorities announced Thursday that three individuals tied to Super Micro Computer Inc. have been indicted for allegedly orchestrating an illegal scheme to export billions of dollars worth of advanced computer servers containing cutting-edge Nvidia processors to China.
The defendants are accused of breaking federal export control regulations by illegally redirecting enormous quantities of high-performance servers manufactured in America to Chinese buyers during 2024 and 2025, according to court documents filed in Manhattan federal court.
FBI Assistant Director in Charge James C. Barnacle Jr. revealed in a statement that the accused individuals employed falsified paperwork, set up fake equipment displays to fool audit inspections, and operated through a front company to hide their illegal activities and real customer base.
“Schemes such as this pose a direct threat to U.S. national security,” stated U.S. Attorney Jay Clayton.
The processors manufactured by Nvidia have become crucial components for data centers that run artificial intelligence systems — revolutionary technology that could transform society and shift global power dynamics. This has sparked an intense competition between America and China for AI dominance, reminiscent of the nuclear weapons development race between the United States and Germany during World War II.
To maintain technological superiority, President Joe Biden implemented restrictions on Nvidia AI chip sales to China — limitations that President Donald Trump has continued for the company’s most advanced processors. The Trump administration recently began relaxing the ban on Nvidia’s lower-end AI chips sold to China, requiring a 15% fee to the U.S. government. Despite this adjustment, Nvidia excluded any Chinese sales from its revenue projections in its latest financial report released last month.
Authorities arrested Yih-Shyan “Wally” Liaw, 71, an American citizen serving as senior vice president and board member of Super Micro Computer, in California Thursday alongside Ting-Wei “Willy” Sun, 44, who worked as a company contractor. Ruei-Tsang “Steven” Chang, employed as a sales manager for the company’s Taiwan operations, remains at large, officials reported. Liaw, a Fremont, California resident, was freed on bail, while Sun, a Taiwanese citizen, was detained pending a Friday bail hearing. Legal representation for both men was not immediately available.
Court filings allege that Liaw and Chang instructed leaders of a Southeast Asian company to order $2.5 billion in servers from the San Jose, California-headquartered Super Micro Computer during 2024 and 2025.
Investigators say the operation grew increasingly bold over time, with at least $510 million worth of Super Micro Computer servers being illegally shipped to China following their assembly in the United States.
While legal documents did not name the company directly, Super Micro Computer Inc. released a statement Thursday evening confirming the employment relationships of the arrested individuals.
“The conduct by these individuals alleged in the indictment is a contravention of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” the company stated. “Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations.”
The company emphasized it was not charged in the indictment and added that it “has been cooperating fully with the government’s investigation and will continue to do so.”
Nvidia responded with its own statement, saying “strict compliance is a top priority for Nvidia.”
“We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled U.S. 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,” the company declared.
Despite being blocked from Chinese markets, Nvidia has experienced remarkable growth over the past three years, with its market capitalization jumping from approximately $400 billion at the close of 2022 to $4.3 trillion currently — making it the world’s most valuable company.
This week, Nvidia CEO Jensen Huang indicated the AI surge will persist, forecasting that the company will soon accumulate a $1 trillion backlog of chip orders, twice his projection from a year earlier.
