SMCI Co Founder arrested for allegedly smuggling $2.5B in Nvidia AI servers to China, one of the largest U.S. export control cases.
Author: Arushi Garg
20th March, 2026: Super Micro Computer (SMCI) co-founder Yih-Shyan “Wally” Liaw and two associates have been arrested for allegedly conspiring to smuggle approximately $2.5 billion worth of Nvidia-powered AI servers to China in violation of strict U.S. export controls. The scheme reportedly involved routing shipments through Southeast Asian shell companies using dummy servers and falsified documentation to bypass restrictions aimed at limiting China’s access to cutting-edge AI technology. SMCI shares plunged as much as 22% in after-hours trading, highlighting one of the largest enforcement actions in the ongoing U.S. crackdown on AI chip exports since 2022.
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Dan
@RealDanBergman
@DiscoverCrypto The company must have known; they must have done a great job covering it up.
BREAKING! SMCI's co-founder just got arrested for smuggling $2.5B in Nvidia GPUs to China. $510M in 3 weeks. Fake servers to fool auditors. A hair dryer to swap serial numbers. Encrypted chats to coordinate everything. He's got $464M in SMCI stock and now faces 30 years in https://t.co/pBlaY26C8W
04:00 AM·Mar 20, 2026
Raymond
@Rumble_Ray
@DiscoverCrypto Prosecutors chose to charge only the individuals after what appears to be a lengthy investigation. If the DOJ had evidence of corporate knowledge, ratification, or systemic failure at the entity level, they almost certainly would have included the company. Still I can see it
BREAKING! SMCI's co-founder just got arrested for smuggling $2.5B in Nvidia GPUs to China. $510M in 3 weeks. Fake servers to fool auditors. A hair dryer to swap serial numbers. Encrypted chats to coordinate everything. He's got $464M in SMCI stock and now faces 30 years in https://t.co/pBlaY26C8W
02:59 AM·Mar 20, 2026
Macro Bombastic
@MacroBombastic
@DiscoverCrypto yikes bro, sounds like the king of pumps got pumped instead
BREAKING! SMCI's co-founder just got arrested for smuggling $2.5B in Nvidia GPUs to China. $510M in 3 weeks. Fake servers to fool auditors. A hair dryer to swap serial numbers. Encrypted chats to coordinate everything. He's got $464M in SMCI stock and now faces 30 years in https://t.co/pBlaY26C8W
02:48 AM·Mar 20, 2026
Since 2022, the U.S. has intensified export controls on advanced AI chips, aiming to limit China’s access to cutting-edge technology. In 2025, similar smuggling cases surfaced, triggering sharp sell-offs in related stocks, with declines of 10–20% due to regulatory concerns. These events set the stage for heightened scrutiny of centralized AI hardware firms and their global supply chains.
Comparison of major AI hardware export enforcement actions and market reactions
Yih-Shyan “Wally” Liaw, SMCI co-founder and board member, along with a Taiwan-based sales manager and a contractor, face federal charges of conspiracy to violate export controls, smuggling goods, and defrauding the United States. Liaw and one co-defendant were arrested in California while the third individual remains a fugitive.
Super Micro Computer confirmed it is not named as a defendant in the indictment. The company immediately placed the two employees on administrative leave, terminated its relationship with the contractor, and stated it is fully cooperating with the ongoing investigation.
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