Super Micro Co-Founder Arrested in Alleged $2.5 Billion AI Chip Smuggling Case

US authorities have charged and arrested Yih-Shyan Liaw over an alleged scheme to illegally export advanced artificial intelligence hardware to China. The case centers on claims that billions of dollars worth of servers containing restricted technology were routed through deceptive channels.

Alleged Export Violations and Concealment Tactics

According to the U.S. Department of Justice, Liaw and two sales executives conspired to bypass export controls by selling servers embedded with sensitive graphics processing units to Chinese buyers. The indictment alleges the use of shell companies, falsified documentation and staged equipment to disguise transactions totaling approximately $2.5 billion.

Prosecutors highlighted that more than $500 million in sales occurred within a short period in 2025, underscoring the scale of the operation. One of the accused remains at large outside the United States.

Company Response and Market Impact

Super Micro Computer stated it was not charged and emphasized that the alleged actions violated its internal policies. The company added that it is cooperating with investigators.

Super Micro’s stock has since dropped 13.25% to $29.71 in after hours trading.

Following the announcement, the firm’s stock dropped sharply in after-hours trading, reflecting investor concern over the legal developments. The case highlights growing scrutiny around the global movement of advanced AI hardware and enforcement of export regulations.

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