By Wu Qiaoxi | 2026-03-24

A Super Micro co-founder has been charged with conspiring to divert about $2.5 billion worth of Nvidia-powered servers to China. The case highlights the scale of alleged efforts to move restricted US artificial intelligence (AI) hardware to Chinese buyers.

An indictment unsealed by the US Attorney's Office for the Southern District of New York on March 19 charged Yih-Shyan "Wally" Liaw, a Super Micro co-founder and board member, along with Ruei-Tsang "Steven" Chang, a sales manager in the company's Taiwanese office, and contractor Ting-Wei "Willy" Sun.

Prosecutors said the three routed servers carrying restricted Nvidia H200 and B200 graphics processing units through an unnamed Southeast Asian company before the systems reached buyers in China. The suspects allegedly moved those chips in defiance of US export controls requiring a license for shipment to China.

'Tangled web of lies'

Police arrested Liaw, a US citizen, and Sun, a Taiwanese citizen, March 19, while Chang, another Taiwanese citizen, remains a fugitive, according to the US Justice Department. Prosecutors said the operation moved US-assembled servers first to facilities in Taiwan, then through other countries in Southeast Asia, where workers repacked them in unmarked boxes before forwarding them to China.

"The defendants participated in a systematic scheme to divert massive quantities of servers housing US artificial intelligence technology to customers in China," US Attorney Jay Clayton said. "They did so through a tangled web of lies, obfuscation, and concealment."

The indictment says the scheme generated about $2.5 billion in server purchases by the Southeast Asian intermediary between 2024 and 2025. It alleges that the suspects sent at least approximately $510 million worth of servers to China between late April 2025 and mid-May 2025 alone. The manufacturer had no US Commerce Department license to export such servers to China, say the prosecutors.

Dummy servers

The defendants took extensive steps to hide the operation from both the manufacturer's compliance teams and US export control officials, say authorities. The alleged conspirators used false documents, a pass-through company in Southeast Asia and thousands of dummy servers staged for inspection after they already had shipped the real machines to China, the indictment says.

Surveillance video cited by prosecutors showed workers using hair dryers to remove labels and serial numbers from real servers and to place them on dummy machines left behind for inspectors.

The indictment detailed Liaw's push to move more-advanced products.

In one text message, he allegedly asked an executive at the Southeast Asian company, "Roughly how many you can take by January? Feb? March? April?" Even a rough forecast was "the only way to have [Nvidia] to promise the B200 allocation so far as I know," he said.

Liaw later sent the executive a White House statement on an upcoming export rule and urged faster shipments before it took effect, it added.

Regional hazard for US security

The case points to a broader national security concern behind US export controls.

Servers containing advanced Nvidia chips may not be sold legally to China without a license because such systems could contribute to Chinese military potential, surveillance capabilities or other dual-use applications.

The alleged route through Taiwan and Southeast Asia shows how criminals can thwart these controls not only through direct US-China trade but across commercial networks running through the wider Indo-Pacific supply chain.

The indictment did not name Super Micro as a defendant. The company said it had placed Liaw and Chang on administrative leave and terminated its relationship with Sun, adding that the alleged conduct contravened its policies and compliance controls and that it was cooperating with the investigation.

Similar scrutiny has surfaced elsewhere in Southeast Asia over the past year.

In Singapore, prosecutors in March added more charges in an ongoing fraud case tied to Nvidia-linked server shipments, including allegations involving Dell and Super Micro. Malaysia later tightened controls on the export, transshipment and transit of high-performance US-origin AI chips after earlier concerns over possible diversion routes in the region.

Largest case yet

The alleged scheme is "probably the largest export-control violation ever in terms of dollar value," said Erich Grunewald, a senior researcher at the Institute for AI Policy and Strategy, according to MarketWatch.

"Verifying the end uses and end users of products sold by companies like Super Micro remains a challenge, and diversion through Southeast Asian intermediaries continues to be a recurring issue," Hanna Dohmen, a senior research analyst at the Georgetown University Center for Security and Emerging Technology in Washington, DC, told the outlet.

Such efforts show that enforcing export controls on chips and chip-manufacturing equipment should remain a priority, she said.