Industry SuperMicro Allegedly Smuggled $2.5B in NVIDIA Chips to China With Fake Servers, and Somehow Thought Nobody Was Watching Muhammad Zuhair • at EDT Add on Google SuperMicro, a leading AI infrastructure provider, has reportedly been charged by the Justice Department for smuggling NVIDIA's servers to China, but the way they did it is a lot more surprising. SuperMicro's Employees Used Bogus Servers & 'Hair Dryers' To Deceive U.S. Export Control Officers The issue of NVIDIA's AI chips being smuggled to China has persisted since the Biden administration, and it has been a concern not just for the administration but also for NVIDIA, which has previously said there are "no signs of diversions". Well, it appears that SuperMicro was involved in a 'smuggling scandal', in which it is reported that chips worth billions of dollars reached China through deception techniques involving the company's co-founder, Yih-Shyan "Wally" Liaw. Here's how the smuggling actually happened. Related Story NVIDIA’s China Exile Might Finally Be Over, as H200 Comes Back Into Production and a Groq-Based Solution Heads to MarketWally Liaw Alongside NVIDIA's CEO Jensen Huang It is claimed that SuperMicro's operations focused on providing Chinese customers with chip equipment that had been barred from export from the US, and this operation has been in existence since the initial H20 restrictions came into effect. As to how the smuggling venture actually starts, it is reported that US-manufactured AI servers are initially exported to Southeast Asian nations, which is a completely legal activity, so there's no scrutiny there. Now, once the servers reach companies in the SEA, that is where the smuggling loop starts. The NVIDIA H200 AI GPU. NVIDIA Corporation CNBC reports that an SEA firm was responsible for compiling "fake" paperwork that implied the servers were ready for deployment to deceive compliance teams on the ground. At the same time, the company's employees were involved in placing "dummy" servers in storage facilities by taking serial numbers from real units with 'hair dryers' and then affixing them to the fake ones. The idea was to keep US export control officers in the dark, and by the looks of it, this worked until recently. The SuperMicro executive we mentioned above, Liaw, knew about violating export controls, and here's how: When a broker who had bought Nvidia-powered servers from the Southeast Asian company sent Liaw a a text message containing a link to an announcement about Chinese nationals getting arrested for smuggling AI chips into China, Liaw allegedly responded with sobbing emojis. - CNBC It is claimed that SuperMicro had been pushing to ship Blackwell servers as well, but we don't know whether they have reached China. The smuggling network is claimed to have shipped out $2.5 billion in racks, likely focusing more on Hopper products. NVIDIA has officially responded to the DOJ claims as well, and here is what they had to say: We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board—NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective. - NVIDIA This event creates an entirely new regulatory hurdle for NVIDIA, given that the company has already been dealing with 'China hawks' within the administration for quite some time. The idea that China is deprived of Western computing capabilities is starting to weaken in light of recent reports, as we know domestic hyperscalers have begun leveraging cloud computing capabilities from SEA nations, giving them access to Blackwell as well. It would be interesting to see how this incident evolves, but it does open the door to imposing stricter export controls. Some claim that this is the video that actually led to the DOJ investigation: 两年前，车库咖啡创始人苏菂，公开炫耀如何逃避美国的AI技术制裁，走私了200片英伟达的H200显卡；两年后，苏菂的供应商被抓了，美国司法部今天公布案情：联邦调查局(FBI)调查显示，廖、张、孙三人利用东南亚公司，合谋向中国买家出售数十亿美元英伟达GPU，最长面临20年刑期。pic.twitter.com/NUR7GqjV7c— 亚洲金融 Asia Finance (@AsiaFinance) March 19, 2026 Follow on Google to get more of our news coverage in your feeds. Further Reading NVIDIA’s Blackwell B200 Chips Are Reportedly Accessible to China’s ByteDance Through ‘Rental’ Compute Services China’s Catch-22 Is Pushing NVIDIA to the Brink, and the Chipmaker Is Finally Fed Up With It Chinese AI Giants Are Now Getting the “Green Light” to Buy NVIDIA’s H200 AI Chips, as Jensen’s Diplomatic Gamble Begins to Bear Fruit A Chinese AI Chip Startup Unveils a Roadmap That Suprisingly Pledges to Be On-Par with NVIDIA’s Cutting-Edge Vera Rubin By 2027 Read all on SuperMicro Allegedly Smuggled $2.5B in NVIDIA Chips to China With Fake Servers, and Somehow Thought Nobody Was Watching
