Nine indicted over AI server exports

CHINA-BOUND: The nine — including one Nvidia and two Super Micro employees — colluded to ‘illegally export’ servers equipped with advanced chips despite US curbs

Nine people, including employees of Nvidia and Super Micro, have been indicted over illegal exports of artificial intelligence (AI) servers to China, the Keelung District Prosecutors’ Office said yesterday.

Semiconductor powerhouse Taiwan is the world’s largest producer of advanced chips used in AI applications. Prosecutors this year investigated the suspected illegal export of servers equipped with Nvidia chips subject to US export controls.

Washington has imposed curbs since 2022, making it illegal for such semiconductors to be exported or sold in China without a license.

The letters AI (artificial intelligence) are placed on a computer motherboard in an illustration on June 23, 2023.

Eight people, including one employee of Nvidia’s Taiwan unit and two employees of Super Micro’s Taiwan unit, were charged with breach of trust and document forgery in connection with the illegal export of high-end AI servers, Keelung prosecutors said in a statement.

Neither company immediately responded to requests for comment.

A ninth defendant was charged in a related case involving the alleged siphoning of funds from a distributor company involved, the statement said, without providing the full names of any of the defendants.

The alleged scheme involved making it appear that 130 B300 servers ordered from Super Micro would be installed and used at a rented server facility in Taiwan.

Prosecutors said false end-user documents stated that the servers would be installed in Taiwan.

Of those 130 servers, 74 were ultimately exported and delivered to Chinese customers through routes that included direct shipments to China, as well as transshipments through Indonesia, Japan and Hong Kong, they said.

The remaining 56 servers were intended to be exported to a company in Japan, prosecutors said, but Taiwanese customs officials detected irregularities and stopped their export.

The prosecutors said the defendants were “fully aware” that Nvidia and Super Micro have “rigorous internal control procedures” regarding exports.

However, the defendants “colluded with one another at various levels for enormous profit, illegally exporting high-end servers, increasing corporate compliance costs, and severely damaging our nation’s international image,” they added.

Taiwan has tightened export controls in the past few years to keep advanced technology and know-how from reaching China.