Super Micro shareholders sue company over securities fraud after AI chip smuggling bust — furious investors claim company concealed dependence on illicit sales to China

Super Micro Computer, Inc. is facing a lawsuit from some shareholders who claim the company failed to disclose its dependence on illegal Chinese sales, resulting in an inflated stock price. According to Reuters, Super Micro is accused of committing securities fraud because its alleged illegal activities made it look like the firm had a stronger business outlook than actual. Furthermore, they said that the company failed to mention that it had issues with export controls compliance.

Three Super Micro employees, including its co-founder, Yih-Shyan “Wally” Liaw, were charged with conspiring to unlawfully divert cutting-edge U.S. artificial intelligence technology to China last week. It’s alleged that these illegal exports of high-end Nvidia chips delivered around $2.5 billion in sales for the company in 2024, which would account for more than 16% of the company’s total $14.94 billion in sales that year. This news led to a massive 33% drop in stock price for Super Micro, wiping out more than $6 billion in value for investors.

According to reports, real Super Micro servers were shipped to warehouses in Southeast Asia, where their serial numbers were removed and switched to dummy servers to fool inspectors. From there, the real AI servers were sent to China through a fake company that had fabricated paperwork. This shows that this was a deliberate, well-thought-out operation, with thousands of the fake servers still sitting across the region, supposedly awaiting delivery to local customers. While the federal government didn’t accuse Super Micro of any wrongdoing, the fact that a big chunk of its sales is tied to alleged illegal activity will hurt its stock price and shake investor confidence in the company.

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This isn’t the only case that’s being prosecuted in the U.S. right now that relates to AI chip smuggling into China. Three individuals — one from China and two from the U.S. — have just been indicted over the same issue. The Department of Justice even released images of damning text messages between the conspirators, with one message composing a letter to encourage others to find clients who will “act as pass through (sic) partner for customers in China.” These cases, alongside the dozens of reports of AI chip smuggling from Singapore, Malaysia, and other countries near China, show that there is indeed a “healthy” black market for smuggled Nvidia chips.

President Donald Trump made a complete U-turn in late 2025 after he lifted the ban on H200 exports to China, meaning some of the chips that previously needed to be smuggled out of the U.S. could now be legally sold in the country. In fact, Nvidia CEO Jensen Huang said that the company has already received H200 orders from Chinese customers and that it has received licenses from the U.S. government to deliver them. Still, the uncertainty from Beijing has led some companies to consider purchasing these AI GPUs from the black market, especially as AI hyperscalers across the world race to build the most advanced model possible.

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