Supermicro-tied execs used Thailand government entity to ship Nvidia AI GPUs to China — report alleges Chinese web giant Alibaba received restricted servers

A Bloomberg investigation on Friday shed some additional light on the indictment of Supermicro executives and employees tied to a $2.5 billion smuggling of restricted hardware to China. As it appears, the group allegedly used a Thailand-based government-related entity to route restricted Nvidia AI GPUs to none other than Alibaba itself, whose AI ambitions can easily absorb hardware worth far more than a couple of billion dollars.

Supermicro's alleged violations of U.S. export controls that ended up as shipments of restricted Nvidia AI accelerators to China and Russia have caught a lot of attention in recent years, as billions of dollars worth of hardware were shipped to American foes. The new Bloomberg report claims that Thailand-based Obon Corp. is the previously unnamed Southeast Asian intermediary referenced in the indictment, which claims that some of the hardware ultimately reached Alibaba.

The intermediary described in court documents as 'Company-1' was allegedly Obon, a Bangkok-based company connected to Thailand's sovereign AI initiatives, according to Bloomberg. The new firm further states that some of the systems sold through OBON may have gone to Alibaba, although the Chinese technology giant denied any involvement and said it had never deployed prohibited Nvidia hardware in its data centers.

The report notes that the servers reportedly included Nvidia H200-based systems, which fall under U.S. export restrictions intended to prevent China from obtaining top-tier AI compute hardware without government approval. By now, H200 has been approved for exports to China, though it has not reported selling them to China officially.

The original indictment accused Supermicro co-founder Yih-Shyan 'Wally' Liaw, Supermicro Taiwan sales manager Ruei-Tsang 'Steven' Chang, and third-party broker Ting-Wei 'Willy' Sun of organizing a large-scale diversion network that rerouted Nvidia Hopper-based AI servers. Prosecutors alleged that the group used a Southeast Asian front company, falsified documentation, and maintained inventories of dummy servers to conceal actual shipments of systems containing advanced Nvidia GPUs into China.

The alleged perpetrators used hair dryers to transfer serial-number labels from legitimate servers onto empty chassis to deceive inspectors and install the restricted hardware afterward, according to the allegations. The U.S. authorities estimate that the operation generated roughly $2.5 billion in sales beginning in 2024. Liaw and Sun were arrested, while Chang continues running for his life.

In general, the case raises concerns about the effectiveness of export-control enforcement across Southeast Asia. Nonetheless, as long as a market like China exists, the supply will always be there.

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