Supermicro co-founder Yih-Shyan “Wally” Liaw was arrested by Federal agents this week for smuggling computer servers containing advanced Nvidia chips to China. The prominent Silicon Valley executive was charged alongside two others for working in secret to divert some $2.5 billion in GPUs.
The US Department of Justice claims Liaw was directly involved in the smuggling operations over the past two years. He allegedly worked with Supermicro’s Taiwan general manager Ruei-Tsang “Steven” Chang to find Chinese buyers that wanted the servers — which were packed with highly coveted GPU chips. FBI Assistant Director in Charge James C. Barnacle Jr said in a release that the defendants used fabricated documents, staged bogus equipment to pass audit inventories and utilised a pass-through company to conceal their misconduct and true clientele list.
According to a Fortune report, their alleged pipeline began with the duo directing executives at an unnamed Southeast Asian company to place purchase orders with Supermicro. These orders — seemingly destined for the other company — would be assembled and shipped before being handed off to a shipping and logistics company. This organisation would allegedly get rid of the identifying packaging before putting the servers in unmarked boxes and sending them off to China.
Who is Yih-shyan ‘Wally’ Liaw?
He is an US citizen and a co-founder of the AI company Super Micro. Liaw has been part of the company’s rise for more than 30 years — shaping its growth into a significant player in the AI infrastructure ecosystem.
US-China AI war – Why are NVIDIA chips so important?
Nvidia’s processors have emerged as indispensable building blocks for the data centers that power artificial intelligence — a potentially game-changing technology that could reshape society and change the balance of power in the world. Both China and the United States have been duelling to gain the upper hand in AI over the past few years.
Former US President Joe Biden had put restrictions on the sale of Nvidia’s AI chips to China — a prohibition that President Donald Trump has maintained on the company’s most powerful processors.
Last year the Trump administration began loosening the ban on Nvidia’s China sales for its lower-tier AI chips in exchange for a 15% commission paid to the U.S. government. But even with that concession, Nvidia still didn’t factor in any China sales in the revenue forecast included in its most recent financial report released late last month.