Three individuals, including a senior vice president of Super Micro Computer Inc., have been charged with conspiring to smuggle advanced artificial intelligence technology to China.
The indictment, presented in Manhattan federal court, claims that the defendants were involved in a scheme to illegally divert billions of dollars' worth of computer servers equipped with high-performance Nvidia chips from the U.S. to China over the period of 2024 to 2025, contravening U.S. export control laws.
James C. Barnacle Jr., FBI Assistant Director in Charge, stated that the accused utilized forged documents, staged equipment, and a pass-through company to conceal their activities and the identities of their true clients.
U.S. Attorney Jay Clayton emphasized that operations like this pose a significant threat to national security.
Nvidia's processors are crucial for data centers supporting artificial intelligence, a technology that is pivotal in the global race for technological supremacy. This competition between the U.S. and China evokes historical parallels to the arms race during World War II, particularly regarding nuclear arms development.
In an effort to maintain a competitive edge, President Joe Biden's administration has imposed restrictions on Nvidia's chip sales to China, a policy initially set by the Trump administration. Although there have been some relaxations on sales of lower-tier AI chips under certain conditions, Nvidia has not included any anticipated revenue from China sales in its latest financial forecasts.
The individuals charged are Yih-Shyan “Wally” Liaw, 71, a U.S. citizen and senior vice president at Super Micro Computer, and Ting-Wei “Willy” Sun, 44, a contractor for the firm. Ruei-Tsang “Steven” Chang, a sales manager based in Taiwan, remains at large. Liaw was arrested in California and released on bail, while Sun, a Taiwanese citizen, is awaiting a bail hearing.
The indictment alleges that Liaw and Chang directed a Southeast Asian company to order $2.5 billion worth of servers from Super Micro Computer during the specified timeline.
Authorities claim that the scheme became increasingly audacious, with at least $510 million worth of servers being sent to China after being assembled in the United States.
Super Micro Computer Inc. acknowledged the arrests in a statement, clarifying that the individuals acted against the company’s policies and compliance controls, which are designed to adhere to export laws. The company asserted that it is not under indictment and has been fully cooperating with the ongoing investigation.
Nvidia also released a statement highlighting its commitment to compliance with export regulations. The company noted, “Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board,” emphasizing that it does not support or service such systems.
Despite the restrictions on sales to China, Nvidia has experienced remarkable growth, with its market value soaring from approximately $400 billion at the end of 2022 to an impressive $4.3 trillion today, surpassing all other companies globally.
Recently, Nvidia's CEO Jensen Huang projected continued growth in the AI sector, forecasting a backlog of chip orders reaching $1 trillion, doubling his previous year’s estimate.
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Source: SecurityWeek News