Investors dump Super Micro after alleged US$2.5 billion AI export‑control scheme to China surfaces
Billions of dollars’ worth of Nvidia‑powered servers allegedly moved into China through one US supplier, and investors wiped close to a third off its value in a single day.
US prosecutors have charged three people linked to Super Micro Computer with helping divert at least US$2.5bn of AI servers to China in violation of export‑control laws, putting a key Nvidia partner and its shareholders in the crosshairs.
CNBC said the US Attorney’s Office for the Southern District of New York charged Yih‑Shyan “Wally” Liaw, Ruei‑Tsang “Steven” Chang and Ting‑Wei “Willy” Sun with violating the Export Control Reform Act for allegedly diverting Nvidia‑powered servers to China.
Reuters said prosecutors mentioned only a “US manufacturer” in the complaint and did not identify Super Micro.
The San Jose‑based company then confirmed it is the firm involved, adding that it is not a defendant and has cooperated with investigators.
According to CNBC, the indictment alleges the three associates of a US server maker used a Southeast Asian company as a middleman that compiled fake paperwork to appear as if it would use the servers itself.
The Southeast Asian company then had a separate logistics firm repackage the systems to conceal them before sending them to China.
Prosecutors alleged that the group routed servers assembled in the US to Taiwan and then on to other Southeast Asian facilities where they were put into unmarked boxes before going to China, as per Reuters.
Scale and mechanics of the scheme
The alleged diversion is large and recent.
The Southeast Asian company bought about US$2.5bn of servers between 2024 and 2025, according to the Justice Department.
CNBC reported that the indictment alleges US$510m worth of servers sold in spring 2025 were routed through a Southeast Asian firm to China and that the manufacturer lacked a US Commerce Department licence to export Nvidia‑powered servers to the country.
Prosecutors said the defendants staged thousands of “dummy” servers—non‑working replicas—to mislead the server maker’s compliance team and a US export‑control officer, while the real machines had already gone to China.
Reuters reported that surveillance video showed workers using hair dryers to remove labels and serial numbers from the real systems and put them on dummy machines.
CNBC said Chang worked to stop auditors from inspecting parts of data centres where the Southeast Asian company was supposedly keeping servers that had already gone to China, and arranged for an auditor he called “friendly” to do the review.
The Wall Street Journal reported that executives including Liaw discussed bringing in about 100 people, including forklift operators, and arranging meals and a 20‑person shuttle bus to help stage dummy servers before auditors visited.
Individuals charged and company response
Liaw co‑founded Super Micro in 1993, sat on its board and served as senior vice‑president of business development, and controlled US$464m of Super Micro shares, according to Reuters.
Chang was a sales manager in Taiwan and Sun was a contractor.
The Justice Department said Liaw, a US citizen originally from Taiwan, and Sun, a citizen of Taiwan, were arrested Thursday and will be presented in the Northern District of California, while Chang, also a citizen of Taiwan, remains a fugitive.
CNBC said Liaw appeared in court Thursday and secured release on an unsecured bond, with a bond hearing set for Wednesday; Sun’s detention hearing is scheduled for Monday.
Super Micro said it has placed Liaw and Chang on leave and ended its relationship with Sun.
After the indictment, Liaw resigned from the board, leaving eight directors and no changes to committee structure.
The company named DeAnna Luna, who joined from Intel in 2024, as acting chief compliance officer; she has been vice‑president of global trade and sanctions compliance.
Super Micro said “the conduct by these individuals alleged in the indictment is a contravention of the company’s policies and compliance controls” and that it maintains “a robust compliance program” and is committed to following US export and re‑export laws.
The Wall Street Journal reported that neither Super Micro nor Nvidia has been accused of wrongdoing.
Market reaction and broader risk
Super Micro shares fell 33 percent on Friday after the federal court released the indictment, according to CNBC.
Reuters reported that the stock sank 28 percent on Friday and that the drop could erase more than US$5bn from its US$18.49bn market value if losses hold.
The Wall Street Journal said the decline erased more than US$6bn in market value and that shares fell nearly 12 percent to US$27.30 in after‑hours trading.
Analysts at Melius Research told Reuters Super Micro’s revenue could face “enormous” risk as customers reassess supplier exposure and said they see Dell as the primary beneficiary, citing its scale and closer ties with Nvidia; Reuters reported that Dell shares gained 6 percent.
Reuters noted that soaring demand for AI chips had pushed Super Micro’s valuation to a peak of about US$67bn in 2024, but margin pressure from building servers and earlier allegations from short seller Hindenburg have already dragged the stock lower.
