US Charges Three with Smuggling $2.5 Billion Worth of AI Chips to China

AI Summary

Three individuals associated with Super Micro Computer, including its co-founder, have been charged with smuggling $2.5 billion worth of US AI technology to China in violation of export laws.

The US Department of Justice has charged three people, including a co-founder of Super Micro Computer, with helping to smuggle at least $2.5 billion worth of US AI technology to China. The indictment alleges a complex scheme to send US-made servers through Taiwan to other countries in Southeast Asia, where they were swapped into unmarked boxes and sent on to China.

The defendants, Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun, are accused of using fabricated documents and staged bogus equipment to pass audit inventories, and a pass-through company to conceal their misconduct and true clientele list.

The US has had export restrictions on China for advanced AI chips since 2022. Nvidia, which dominates the market for AI chips, has stated that strict compliance with export laws is a top priority.

Liaw, 71, was arrested in California and released on bail, while Sun, 44, a company contractor, was held for a bail hearing. Chang remains a fugitive. Super Micro's shares fell 8 percent in after-hours trading following the news.