Federal authorities indicted three men charged with conspiracy to sell sophisticated artificial intelligence servers containing Nvidia chips to China in violation of U.S. export controls.
Yih-Shyan “Wally” Liaw, Ruei-Tsang “Steven” Chang and Ting-Wei “Willy” Sun conspired to illegally ship “billions of dollars” worth of embargoed gear with advance graphics processing units (GPUs), the Justice Department said in unsealing the indictment against the three men.
Mr. Liaw is a U.S. national, and Mr. Sun and Mr. Chang are Taiwanese nationals. Mr. Chang is a fugitive and the other two were scheduled for arraignment Friday in federal court in Northern California, the department said.
All three were involved with a San Jose, California, company called Super Micro Computer Inc. that designs and builds high-performance computer servers for AI and cloud computing, the company said.
Mr. Liaw, 71, is a senior vice president for business development and a board member, and Mr. Chang, 53, is a sales manager in Taiwan. Mr. Sun, 44, was a contractor.
“Supermicro has placed the two employees on administrative leave and terminated its relationship with the contractor, effective immediately,” the company said.
John A. Eisenberg, assistant attorney general for national security, said the indictment details efforts to evade export laws through the use of false documents, staged dummy servers that sought to mislead inspectors and an elaborate transshipment scheme to supply China with restricted AI technology.
“These chips are the product of American ingenuity, and [the national security division] will continue to enforce our export-control laws to protect that advantage,” he said.
The technology transfer case may be difficult to prosecute as a result of varying Trump administration policies that initially aimed to restrict advanced U.S. AI technology from boosting China’s military.
The administration then loosened the policy in January to allow Nvidia to sell China advanced H200 microchips that are up to 13 times more powerful than previously allowed.
The reversal followed lobbying of the White House by Nvidia CEO Jensen Huang.
The chips involved in the operation included Nvidia advanced AI accelerator chips, such as the Nvidia B200, H100 and H200 GPUs, and servers incorporating those chips, the indictment states.
The technology is included on the Commerce Department’s Bureau of Industry and Security Commerce Control List that requires an export license to be sold to China.
The Justice Department said the Commerce Department imposed license requirements on AI technologies for China and Hong Kong to “protect U.S. national security and foreign policy interests.”
“In particular, the U.S. Department of Commerce has placed restrictions on the export and reexport of items that could make a significant contribution to the military potential or nuclear proliferation of other nations or that could be detrimental to the foreign policy or national security of the United States,” the statement said. “Those regulations reflect a formal determination that the computing capabilities in advanced artificial intelligence accelerator hardware are of sufficient strategic significance that their transfer to China poses an unacceptable risk to national security.”
The indictment described Mr. Sun as a “fixer” who worked with the other two men to divert export-controlled technology to China.
The servers containing high-tech GPUs were diverted to China without a U.S. license.
According to prosecutors, Mr. Liaw and Mr. Chang worked closely with brokers linked to customers in China. The diversion involved a Southeast Asian company ordering advanced servers containing embargoed U.S. technology for Super Micro plants in Taiwan.
The banned gear was then repackaged and sent via unmarked boxes to China, the statement said. False shipping documents were also used to show the goods were sent to Super Micro.
According to the department, about $2.5 billion worth of servers were purchased between 2024 and 2025 from a U.S. manufacturer that was not identified.
“The defendants’ scheme became more brazen over time and resulted in massive quantities of servers with controlled U.S. artificial intelligence technology being sent to China,” the statement said.
Each of the defendants is charged with one count of conspiracy to violate the Export Controls Reform Act. If convicted, they each face a maximum 20-year prison term. Additional counts of smuggling and fraud charges carry maximum penalties of 10 years in prison.
The alleged conduct by those involved violates Super Micro policies and compliance controls, the company said, noting it is cooperating with investigators and is not named as a defendant in the indictment.
Jay Clayton, U.S. attorney for the Southern District of New York, said the defendants secretly diverted “massive quantities” of advanced AI technology to China.
“They did so through a tangled web of lies, obfuscation and concealment — all to drive sales and generate revenues in violation of U.S. law,” he said.
• Bill Gertz can be reached at bgertz@washingtontimes.com.
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