Three Charged Over Alleged Scheme to Smuggle AI Chips to China
US authorities have charged three individuals over an alleged plot to illegally export advanced artificial intelligence chips to China, the US Department of Justice announced.
According to prosecutors, the trio is accused of conspiring to sell billions of dollars’ worth of restricted US technology by falsifying documents and using deceptive methods to evade regulatory checks. The equipment in question included high-end semiconductors produced by Nvidia, which are subject to strict export controls due to national security concerns.
Those charged include US citizen Yih-Shyan “Wally” Liaw and Taiwanese national Ting-Wei “Willy” Sun, both of whom have been arrested. A third suspect, Ruei-Tsang “Steven” Chang, remains at large.
Liaw is a co-founder of Super Micro Computer, a California-based firm that manufactures servers and supplies technology equipment. In a statement, the company confirmed that the individuals had been associated with it but emphasized that it has not been named as a defendant in the case. It also said it is cooperating with investigators, adding that Liaw and Chang have been placed on leave, while Sun’s contract has been terminated.
Prosecutors allege that the group worked with an unnamed Southeast Asia-based company to divert US-made servers containing Nvidia chips to intermediaries in China. The plan reportedly involved submitting false records to suggest the equipment would remain with the intermediary company, referred to in court documents as “Company-1.”
Authorities claim that once the servers were purchased, they were repackaged and concealed in unmarked boxes before being shipped onward to China. To avoid detection during audits, the suspects allegedly used thousands of dummy servers designed to resemble the original equipment.
Investigators also allege that labels and serial numbers were manipulated to disguise the shipments, with some actions reportedly captured on surveillance footage.
The Department of Justice said the operation may have involved the purchase and transfer of approximately $2.5 billion worth of equipment containing controlled AI technology – none of which had the required export licences.
Nvidia, whose chips are widely used in AI development, said it works closely with customers and regulators to ensure compliance. A company spokesperson warned that attempts to divert controlled technology are unlikely to succeed due to strict enforcement measures.
The case highlights ongoing tensions over the export of advanced US technology to China, particularly as Washington continues to tighten restrictions on sensitive semiconductor sales.
In a related case, US authorities have also charged two Chinese nationals accused of routing restricted AI chips through third countries, including Malaysia and Singapore, before allegedly redirecting them to China.
The investigations remain ongoing.
