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SuperMicro Founder (and Director) Indicted on Charges of Smuggling GPUs to China
raindog308
Administrator, Veteran
in General
$2.5 billion dollars' worth of GPUs bought, concealed, and shipped to China, all while lying to the government about it. The photos show the massive scaled of this operation.
https://lowendbox.com/blog/supermicro-founder-indicted-on-charges-of-smuggling-nvidia-gpus-to-china/
Comments
The mere fact that some GPUs are prohibited from going to China is ridiculous. It's purely an attempt by the US to maintain economic superiority in the race to the AI bottom.
Whatever happened to the so-called 'free market'? I guess free trade is only free when you're the one winning.
I wonder what the implications are for super micro as a company and by extension the hosting industry and if they could do a deal for getting the charges dropped in exchange for an all platform update to replace java with html5 WITH iso mounting.
I would pay towards the 2.5 billion debt for that
We are living in some strange times.
GPU shipped to China.. Funny
Supermicro was predicting $40 B revenue for the fiscal year 2026 last year and not many believed it. Maybe they were including these China exports. Anyway the investment communities think they had enough this time, the third time is not the charm:
The 2018–2020 Accounting Scandal (SEC Charges)
The Allegation: Supermicro was accused of widespread accounting violations between 2015 and 2017. The company was found to be prematurely recognizing revenue (booking sales before goods were delivered) and understating expenses to make their financial health look better than it was.
The Outcome:
Delisting: The company failed to file necessary financial reports on time and was delisted from the Nasdaq in 2018.
Settlement: In 2020, Supermicro settled with the SEC, paying a $17.5 million penalty to resolve the investigation.
The 2024 "Hindenburg" Scandal (Auditor Resignation)
The Allegation: In August 2024, short-seller Hindenburg Research released a scathing report accusing the company of "accounting manipulation," "sibling self-dealing" (unclosed transactions with companies owned by the CEO's brothers), and evading export sanctions.
The Outcome:
Auditor Resignation: In October 2024, Supermicro’s auditor, Ernst & Young (EY), abruptly resigned in the middle of an audit. In their resignation letter, EY stated they could "no longer rely on management's and the Audit Committee's representations," effectively saying they did not trust the company's leadership.
DOJ Probe: This triggered an initial probe by the U.S. Department of Justice, which set the stage for the eventual criminal charges filed in 2026.
Summary of the "Three Times":
Hope there's a Supermicro fire sale.
It's a bit ridiculous that there is now an extreme export control on AI chips under national security concerns, crazy time we live in. The time of AI, Ram prices going through the roof, GPU's as well, fun time to be alive.
another funny aspect of this is, that China is claiming all the time that they only use homegrown GPUs to genereate their LLM (remember the nvidia crash after deepseek was launched?).
so much about chinese independence from US GPUs....
What makes that ridiculous? It's considered a massive edge in many, many ways. Considering AI is massive in autonomous drones, it's hugely important.
You're too young to remember there use to be encryption export control on the Internet where Americans got the 128 bit stuff and the rest of the world got 40 bit.
Or are you Chinese and just laying some propaganda crumbs?
America got 56-bit back then. The EU wanted 64-bit and the NSA wanted 40-bit, so they settled on 56 instead (technically 64 with 8 bits being a checksum that did not actually add to the cipher's keyspace). It took until the EFF demonstrated a brute force against 56 bits for the NBS (NIST's old name) to start looking for standardizing something stronger (and, in the meantime, standardizing 3DES with 128-bit keys and an effective security of 112 bits).
Annoyingly, there's still cryptography export control on the internet, but US v Bernstein resulted in weakening it substantially and creating an exemption for open source software (which basically defeats the purpose of export control).
Why is this ridiculous? Every superpower does whatever it can do maintain and advance in economic superiority.
Ridiculous and prone to stifling innovation and free trade, but not unexpected, unfortunately.
The US is definitely not unique in that regard.
I mean… China is an adversary to the US. If they had access to something that could make them more powerful than the US it’s not like they’d turn around and sell it.
I get what you mean that the US presents itself as free trade adcovate but don’t fully commit to this themselves but I don’t really find it ridiculous that the most powerful country on earth will prioritize remaining the most poweful country of earth higher than ideology. It’s expected.
I suppose I should have said that it's a ridiculous state of affairs, not that it's ridiculous as in unexpected or shocking, especially with the US going all out to try to prevent dedollarization.
I'm perpetually disappointed, but not shocked in the least.
LOL, those t-shirt source code. Anyway, what do you think about FHE?
Yes we wonder if this is one of the many reasons why we can barely get anything from them...
Then should not preach the world about free economy . It is like bombing other countries because they do not have democracy or kidnapping a sitting president of a country
FHE (assuming you mean fully homomorphic encryption) doesn't have a lot of uses that are interesting to me, but I suspect it'll be used a lot for "confidential computing" for AI crap. That's one reason so much money is being thrown at it.
Yes, I mean that. It's interesting concept that could've reduce lot of compute resource and I/O. A decade ago, I read the concept but didn't use it because of its limitations (and weaknesses). That's why I want to ask you, on the possibility I had overlooked it.
It’s still way more free than the alternatives. But I agree in theory. Practically, not so much.
Hey, its my friend TimboJones! Im too young yes, I did some digging after your comment, oh also no Im not chinese, Im actually european but I would have been too young, its some early-mid '90s so I would have been in my single digits still.. I didn't break into double digits until 1997, always learning something new.. and from such an amazing source like TimboJones.
It isn't really, or at least it is but only in the USian mind.
The US is just butthurt because another country is starting to do better economically than they are.
No
See what happens when you give your real name.
Lol, wut?