Three individuals, including the co-founder of a major US server manufacturer, have been charged with conspiring to illegally divert advanced artificial intelligence servers to China, in what US authorities describe as a large-scale violation of export controls.
The indictment names Yih-Shyan ‘Wally’ Liaw, Co-Founder and a senior executive at Super Micro Computer, along with Ruei-Tsang ‘Steven’ Chang, a manager in the company’s Taiwan office, and Ting-Wei ‘Willy’ Sun, a third-party broker. Liaw and Sun have been arrested, while Chang remains a fugitive.
Prosecutors allege the trio orchestrated a scheme to divert high-performance servers equipped with advanced artificial intelligence chips to Chinese buyers in violation of US export controls.
The servers, assembled in the United States, form part of the infrastructure used in AI and cloud computing systems. According to media reports, the servers involved in the scheme were equipped with NVIDIA’s AI GPUs.
According to authorities, the defendants routed traffic through Taiwan and Southeast Asia via an intermediary company that falsely appeared to be the end customer. The equipment was then repackaged into unmarked boxes and shipped onward to China, concealing its origin and final destination.
To evade detection, the group allegedly relied on falsified documents, misleading internal records, and staged compliance checks. In some cases, investigators say they deployed non-functional “dummy” servers during inspections while the actual machines had already been shipped.
The US Department of Justice also released images showing the staged “dummy” servers used during inspections, as well as surveillance footage capturing individuals preparing and repackaging the equipment.
Between 2024 and 2025, the intermediary company purchased approximately $2.5 billion worth of servers, with at least $510 million diverted to China within a short period in 2025 alone.
Super Micro Computer, a Silicon Valley-based supplier of high-performance servers used in AI infrastructure, said it was not charged in the case. The company has reportedly placed Liaw and Chang on leave and severed ties with Sun.
Officials in the US said the case highlights the strategic importance of export controls on advanced computing systems. AI chips and servers are subject to strict licensing requirements due to their potential use in military and national security applications.
The defendants face charges including conspiracy to violate export control laws, smuggling, and defrauding the United States. If convicted, they could face up to 20 years in prison on the most serious count.
Authorities emphasised that the charges are allegations, and the defendants are presumed innocent unless proven guilty in court.
The case comes amid tightening US export controls on advanced AI chips and servers, which require licences for sales to China due to national security concerns. In 2026, regulators moved to a stricter case-by-case approval system for high-end chips while ramping up enforcement against diversion and illicit rerouting.
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