US tech execs smuggled Nvidia chips to China, prosecutors say

The US Attorney’s Office for the Southern District of New York has charged people associated with US server manufacturers with illegally diverting billions of dollars in artificial intelligence servers to China.

As American companies Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals, the US government is trying to figure out how the high-powered chips officially reached China.

The US government alleges in an indictment unsealed Thursday that Yih-Shan “Wally” Liau, Rui-Tsan “Steven” Chang and Ting-Wee “Willie” Sun worked together to violate the Export Control Reform Act.

Liau is the co-founder of ServerMaker Super Micro Computer and a member of its Board of Directors. He controls $464 million worth of Super Micro shares, according to FactSet. Liau and Super Micro did not immediately respond to requests for comment.

A Southeast Asian company acted as an intermediary, falsified documents to make it appear that it was using the servers, and a separate logistics firm reimbursed the servers to hide them before going to China, according to the indictment.

Nvidia’s There is worldwide demand for training generative AI models for graphics processing units.

The server company’s products containing Nvidia chips are “subject to strict US export controls that prevent them from being sold to China without a license,” the plaintiff said in the indictment. “Those controls are in place to protect US national security and foreign policy interests, among other things.”

US President Donald Trump initially tried to block China from getting the processors. But in December he told Chinese President Xi Ping that the US would allow 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 production to meet H200 purchase orders from China.

Last summer, Nvidia obtained licenses to export the H20 chip to China, with Huang agreeing to provide the US with 15% of its sales in China.

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