Tech Co-Founder Charged with Diverting $2.5B in Nvidia AI Chips to China

Prosecutors allege a sophisticated scheme involving fabricated documents and a pass-through company to circumvent export laws.

Mar. 20, 2026 at 5:51am

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The co-founder of Super Micro Computer, Yih-Shyan Liaw, along with two others, have been charged with orchestrating a scheme to illegally divert $2.5 billion worth of Nvidia AI chips to China. Prosecutors say the defendants used fabricated documents, staged audits, and a pass-through company in Southeast Asia to conceal the true destination of the high-powered servers.

Why it matters

This case highlights the intensifying efforts to control the flow of advanced technology amid growing geopolitical tensions. Nvidia's AI chips are considered critical technology with potential military applications, and the U.S. government has imposed restrictions on their sale to China to maintain a competitive edge.

The details

The indictment details how the defendants allegedly used 'dummy' servers during audits, while the actual AI-enabled hardware was shipped to China. Surveillance footage reportedly shows individuals altering labels and serial numbers to further the deception. The U.S. Attorney for the Southern District of New York, Jay Clayton, stated that such diversion schemes 'pose a direct threat to U.S. National security'.

  • The charges were unsealed on Thursday, March 20, 2026.

The players

Yih-Shyan Liaw

The co-founder of Super Micro Computer who has been charged in the scheme.

Ruei-Tsang Chang

One of the three individuals charged in the alleged scheme.

Ting-Wei Sun

One of the three individuals charged in the alleged scheme.

Super Micro Computer

The tech company where Liaw, Chang, and Sun were affiliated. The company has stated that the alleged actions were a 'contravention of the Company's policies and compliance controls'.

Jay Clayton

The U.S. Attorney for the Southern District of New York who stated that such diversion schemes 'pose a direct threat to U.S. National security'.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights the critical importance of export controls, particularly concerning technologies with military applications, and the need for companies to strengthen their compliance programs and due diligence processes to prevent such diversion schemes.