U.S. Charges Individuals in Scheme to Illegally Export Nvidia Chips to China
The U.S. Department of Justice has charged three individuals with conspiring to illegally export billions of dollars worth of Nvidia-powered servers to China, circumventing U.S. Export controls. The case highlights the ongoing efforts by the U.S. Government to restrict China’s access to advanced technologies, particularly in the realm of artificial intelligence (AI), and the challenges in enforcing those restrictions.
Details of the Alleged Scheme
Yih-Shyan “Wally” Liaw, Ruei-Tsan “Steven” Chang, and Ting-Wei “Willy” Sun are accused of violating the Export Control Reform Act by illegally diverting servers containing Nvidia GPUs to China. According to the indictment, a Southeast Asian company was used as a front to create falsified paperwork, suggesting the servers were destined for legitimate users, while they were actually shipped to China. The scheme involved repackaging servers to conceal their true destination and pressuring compliance teams to approve shipments using “dummy” servers for inspection purposes.
Yih-Shyan Liaw, a co-founder and board member of Super Micro Computer, allegedly controls $464 million worth of the company’s shares. He and Ting-Wei Sun were arrested on Thursday, while Ruei-Tsan Chang remains a fugitive. Super Micro Computer has stated that the alleged actions were a violation of company policy and compliance controls, and has placed Liaw and Chang on leave and terminated its relationship with Sun.
Financial Impact and Company Response
The alleged scheme generated approximately $2.5 billion in sales for the server maker since 2024, with $510 million occurring between late April 2025 and mid-May 2025. Super Micro Computer maintains it had no U.S. Commerce Department license to export servers featuring Nvidia GPUs to China. Shares of Super Micro fell 12% in extended trading following the release of the indictment. The company has replaced its former auditor, Ernst & Young, with BDO.
Broader Context: U.S.-China Tech Restrictions
The U.S. Government initially imposed restrictions on the sale of advanced chips to China under the Trump administration, aiming to prevent Beijing from developing AI capabilities using American technology. While President Trump initially sought to prevent China from obtaining these processors, he later stated he had agreed with Chinese President Xi Jinping to allow Nvidia to ship H200 GPUs to China “under conditions that allow for continued strong National Security.”
Nvidia has since received licenses to export the H20 chip to China and is restarting manufacturing to fulfill H200 purchase orders. Nvidia CEO Jensen Huang has stated the company will provide the U.S. With 15% of its sales in China.
Despite these limited allowances, concerns remain about the potential national security implications of allowing China access to advanced AI chips. Anthropic CEO Dario Amodei has warned that allowing H200 chip exports to China carries national security risks, comparing the decision to “selling nuclear weapons to North Korea.”
Ongoing Competition in AI
The U.S. Government’s efforts to control chip exports are driven, in part, by the emergence of Chinese AI rivals like DeepSeek, which has reportedly trained an AI model on Nvidia’s best chips despite the U.S. Ban. This competition underscores the strategic importance of maintaining a technological edge in the AI field.
“Crimes involving sensitive technology must be met with swift action,” stated Jay Clayton, the former U.S. Attorney for the Southern District of Recent York.