Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: Three charged with illegal diversion of US AI technology to China in Simple Termsand what it means for users..
On March 19, the US Attorney’s Office for the Southern District of New York charged three people in connection with the smuggling of at least $2.5 billion of American AI technology to China. The charge is being handled by U.S. District Judge Edgardo Ramos.
The US Department of Justice (DOJ) has charged Yih-Shyan Liaw, Ruei-Tsang Chang, and Ting-Wei Sun, associated with AI server manufacturer Super Micro Computers. With charges of violating export law, the three are in an indictment unsealed in federal court in Manhattan. The charge alleges that the trio was in a complex plan to send US-made servers to other countries in Southeast Asia with the help of Taiwan. There, these servers were substituted into unmarked boxes and sent onward to China.
Yih-Shyan Liaw, one of the founders of Super Micro in 1993, joined its board of directors in 2023. Ruei-Tsang Chang managed sales in the Taiwan office of Super Micro, while Ting-Wei Sun worked as a contractor for the company. As per the latest update, Liaw and Sun were arrested, but Chang remained a fugitive.
The charge by the DOJ, however, did not mention any names or names of chips that were involved in the alleged scheme. According to reports by Reuters, they are alleged to be Nvidia AI chips. In the report, Nvidia said that “strict compliance” with export laws is among its highest priorities.
READ: How AI from Google helped American Airlines cut climate impact (
“We continue to work closely with our customers and the government on compliance programs as export regulations have expanded,” an Nvidia spokesperson told the agency, adding, “Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board-NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective.”
Attorney for the Southern District of New York, Jay Clayton; Assistant Director of the Counterintelligence and Espionage Division of the FBI, Roman Rozhavsky; and Assistant Director in Charge of the New York Field Office of the FBI. James C. Barnacle, Jr., filed the charge.
“As alleged in the Indictment, the defendants participated in a systematic scheme to divert massive quantities of U.S. artificial intelligence technology to customers in China,” said U.S. Attorney Jay Clayton. “They did so through a tangled web of lies, obfuscation, and concealment—all to drive sales and generate revenues in violation of U.S. law. Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to U.S. national security. Crimes involving sensitive technology must be met with swift action otherwise the law is meaningless. I commend the women and men of our Office, the FBI, and the Department of Commerce for their swift action in identifying, charging, and stopping this brazen evasion of our laws that protect national security and U.S. competitiveness. We will continue to doggedly investigate and prosecute these illegal diversion schemes.”
Charges faced by the three linked to Super Micro Computer
Since 2022, the US has restricted export laws in matters related to advanced AI chips to China. US officials accuse Liaw, Chang and Sun of covering their activity from both the US-based makers of servers and the US export officials. The charges claim that the three took comprehensive actions like using hair dryers to remove labels and serial numbers from the real machines, and placing them on dummy machines that were later shipped to China.
Super Micro Computer’s statement
While the US indictment does not officially name Super Micro Computer. However, the company said it has placed the charged employees on leave and ended its relationship with the contractor. ‘The conduct by these individuals alleged in the indictment is a contravention of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations,” according to a statement quoted by CNBC in its report. “Supermicro maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations.”