The U.S. Attorney’s Office for the Southern District of New York has charged associates of an unidentified U.S. server maker with illegally diverting billions of dollars in Nvidia-powered servers to China.
The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as American artificial intelligence 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.
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.”
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. He did not respond to a request for comment.
Shares of Super Micro fell 12% in extended trading after a federal court released the indictment.
Super Micro said that while the company isn’t named as a defendant, Liaw works as senior vice president of business development, while Chang is a sales manager in Taiwan and Sun is a contractor. The company has placed the employees on leave and ended its relationship with the contractor.
“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,” according to a statement. “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.”
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.
The defendants tried to fool the server maker’s compliance team with “dummy” servers at the Southeast Asian company’s storage facilities, while the real servers had already been forwarded to China, and pressured the compliance team into approving shipments, according to the indictment.
The efforts have yielded around $2.5 billion in sales for the server maker since 2024, with $510 million sold between late April 2025 and mid-May 2025 going to the Southeast Asian company and on to China, the indictment said. The plaintiff said the server maker had no U.S. Commerce Department license to export servers featuring Nvidia GPUs to China.
Chang worked on keeping auditors from inspecting parts of data centers where the Southeast Asian company was supposedly keeping the servers but had in fact gone to China, and he arranged for an auditor he called “friendly” to do the review, the indictment said. In 2024 Super Micro said its auditor, Ernst & Young, had resigned, and later brought in BDO as a replacement.
Nvidia’s graphics processing units have been in demand across the world for training generative AI models.
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.
Prosecutors alleged Liaw pushed for the Southeast Asian company to adopt a more advanced chip, the B200 that employs Nvidia’s Blackwell architecture, in late 2024.
“Roughly how many you can take by January? Feb? March? April?” Liaw wrote in a text message to an executive at the Southeast Asian company. “Just roughly forecast will be fine … . Then we can propose to [Nvidia] with the way they can accept … . This is the only way to have [Nvidia] to promise the B200 allocation so far as I know.”
By 2025, Liaw sent the executive a link to a White House statement about an export rule for AI products that was set to be enacted later in the year, saying that the pace of shipments would need to increase before the effective date, according to the indictment.
“Crimes involving sensitive technology must be met with swift action,” Jay Clayton, the Trump-appointed U.S. Attorney for the Southern District of New York and former chairman of the Securities and Exchange Commission, was quoted as saying in a statement. “otherwise the law is meaningless.” Liaw and Sun were both arrested on Thursday, while Chang is a fugitive, the attorney’s office said.
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