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

The Southern District of New York's U.S. Attorney's Office has unveiled serious charges against individuals linked to a U.S. server manufacturer, alleging they orchestrated the illegal diversion of billions in artificial intelligence servers to China. As American tech giants like Anthropic and OpenAI grapple with competition from Chinese firms such as DeepSeek, the U.S. government has been investigating how advanced chips have made their way into China without proper authorization. In a formal indictment, the government accused Yih-Shyan 'Wally' Liaw, Ruei-Tsan 'Steven' Chang, and Ting-Wei 'Willy' Sun of collaborating to breach the Export Control Reform Act by employing a Southeast Asian company as a conduit for these transactions. Liaw, a co-founder and board member of Super Micro Computer, reportedly holds $464 million in company shares, according to financial data from FactSet. Neither Liaw nor Super Micro has yet responded to requests for comment regarding the allegations. Nvidia's graphics processing units (GPUs) are in high demand globally for training generative AI models, making them a focal point of this investigation. According to the indictment, products from the server company that incorporate Nvidia chips are bound by stringent U.S. export restrictions that prohibit their sale to China without a license. These regulations are designed to safeguard U.S. national security and foreign policy interests. The situation has drawn attention from the highest levels of government. Former President Donald Trump had initially aimed to restrict China's access to these processors. However, he later indicated to Chinese President Xi Jinping that the U.S. would allow the export of Nvidia's H200 GPUs to China, contingent on maintaining strong national security measures. Recently, Nvidia's CEO Jensen Huang announced the company is resuming manufacturing to fulfill H200 orders from China, following last summer's approval of export licenses for the H20 chip, which included an agreement to allocate 15% of sales to the U.S. This situation continues to develop, and updates are expected as more information comes to light.