Super Micro Co-Founder Charged in $2.5 Billion AI Server Smuggling Scheme to China
U.S. authorities arrested Yih-Shyan “Wally” Liaw, co-founder and senior executive of Super Micro Computer, on March 19, 2026, along with one associate, while a third remains at large. According to the Department of Justice indictment, Liaw and two others conspired to divert approximately $2.5 billion in high-performance servers containing restricted Nvidia AI chips to China between 2024 and 2025, in violation of U.S. export controls.
The scheme allegedly involved routing shipments through a Southeast Asian shell company, using fake documents, staging thousands of non-functional “dummy” servers to deceive company auditors, and even swapping serial number stickers with a hair dryer, as captured on surveillance footage. In one three-week period in spring 2025, prosecutors say $510 million worth of servers reached Chinese buyers.
Liaw, who holds roughly $464 million in Super Micro stock, faces charges that carry a maximum penalty of 30 years in federal prison. Super Micro itself is not charged in the case; the company placed the involved employees on leave, terminated its relationship with the contractor, and stated it is cooperating with investigators.
Super Micro shares fell about 12% in after-hours trading following the news. The case underscores ongoing U.S. efforts to enforce export restrictions on advanced AI technology amid national security concerns.