Biggest heist of the US-China Chip War: 3 charged in $2.5bn scheme | Daily Reports Online
- Three men have been charged for exporting restricted AI chips to China
- The men were employees of Super Micro Computer Inc.
- The scheme amassed $2.5 billion in sales, circumventing restrictions on power AI GPUs
A federal investigation has been launched after the US Department of Justice charged three individuals for allegedly smuggling restricted Nvidia AI chips to China.
The three men were not named in court documents, however a statement released by Super Micro Computer Inc. identified those involved.
The smuggling allegedly occurred between 2024 and 2025, with billions of dollars worth of computer servers containing advanced Nvidia making the journey to China.
Article continues below
The masterminds behind the $2.5 billion scheme
Of the three men charged, two have been arrested. Yih-Shyan “Wally” Liaw, a senior vice president and board member of Supermicro, was arrested in California, while Ting-Wei “Willy” Sun, a Supermicro contractor based in Taiwan, was also taken into custody. The third man, Ruei-Tsang “Steven” Chang, worked for Supermicro’s Taiwan office and is currently a fugitive.
Supermicro issued a statement on the arrest of the three men. “The conduct by these individuals alleged in the indictment is a contravention of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” the company said. “Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations.”
The smuggling scheme allegedly amassed $2.5 billion in sales, with the trio managing to divert over $510 million worth of Supermicro servers to China. The servers were allegedly ordered by a Southeast Asian “pass-through” company (noted in the indictment as Company-1) in order to appear as legitimate transactions, before being repackaged and shipped to China.
Supplying China with cutting edge tech
The Supermicro servers largely contained Nvidia H100 and H200 Tensor Core GPUs, which are specifically designed to train and handle large language models (LLMs).
The indictment further states that in order to keep China supplied with the latest technologies, Liaw allegedly pushed for Company-1 to place larger orders, including servers containing Nvidia’s B200 – one of the most advanced GPUs at the time.
The height of the US-China Chip War
The US has had restrictions on the types of GPUs companies are allowed to export to China since October 2022. The primary purpose of these restrictions was to maintain US superiority in AI development, while simultaneously preventing China from building powerful models that could be used for decryption, autonomous weapons systems, and cyberwarfare.
In order to police the enforcement of these restrictions, physical inspections took place to ensure servers weren’t being smuggled into China. However, the three individuals allegedly organized staged “dummy” servers packaged with Supermicro’s labels and boxes, while the original contents of those same boxes were already being shipped to China.
Circumventing the restrictions
As this case would attest, export restrictions are only as good as their physical inspections. While the indictment doesn’t explain the process of a physical inspection, it does state that an audit took place in August of 2025. However, the indictment further states that the individual tasked with conducting the audit was allegedly off-site enjoying entertainment paid for by Company-1.
In order to complete the audit, Sun allegedly sent photos and videos of the dummy servers, complete with their fake labels, to the auditor. The US Bureau of Industry and Security (BIS) later informed Supermicro that Company-1 was diverting its orders to China, and a second audit was scheduled. The second audit again involved dummy servers, and resulted in BIS placing a hold on Company-1’s shipments.
The best antivirus for all budgets
Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds. Make sure to click the Follow button!
And of course you can also follow TechRadar on TikTok for news, reviews, unboxings in video form, and get regular updates from us on WhatsApp too.
