Supermicro’s co-founder was just accused of smuggling $2.5 billion in GPUs to China

US authorities have unsealed a major indictment against Charles Liang, the co-founder and former CEO of server manufacturer Super Micro Computer (Supermicro). The charges allege that Liang masterminded a sophisticated, years-long smuggling operation to illegally export an estimated $2.5 billion worth of restricted Nvidia artificial intelligence (AI) chips to China. Prosecutors claim the scheme was designed to circumvent strict US export controls on advanced semiconductors, which are critical for AI development and national security.

According to the indictment, the operation involved creating a complex network of front companies in Southeast Asia, falsifying shipping documents, and using "dummy" servers to conceal the true destination and nature of the high-value GPUs. The restricted Nvidia chips, such as the A100 and H100 models, are pivotal for training large language models and are subject to US government bans on sales to China. Liang and other Supermicro employees are accused of knowingly violating these controls to supply Chinese entities, including state-linked research institutes and companies.

The case underscores the escalating technological cold war between the US and China, where cutting-edge AI chips have become a focal point of geopolitical tension. Supermicro, a major supplier of server hardware to data centers worldwide, now faces significant legal and reputational risk. This arrest signals a more aggressive enforcement stance by US authorities as they seek to plug leaks in the semiconductor export control regime and maintain a technological edge.