Three more charged over alleged Nvidia GPU smuggling scheme to China
Prosecutors say trio used Thai front companies to reroute high-end AI servers
The US has collared three more people for allegedly attempting to smuggle Nvidia GPUs to China, days after a Supermicro co-founder faced similar accusations.
The Department of Justice charged Chinese national Stanley Yi Zheng of Hong Kong alongside US citizens Matthew Kelly and Tommy Shad English with conspiracy to violate export controls and smuggling laws.
They are accused of trying to buy GPUs worth millions from "a California-based computer hardware company" for illegal shipment to China via businesses in Thailand.
While the DOJ does not explicitly name the computer hardware biz, a purchase order disclosed in the court documents lists a model number for a GPU server "SYS-821GE-TNHR." This corresponds to a Supermicro 8U system that supports Nvidia H100 or H200 GPUs.
In this case, it appears Supermicro and Nvidia became suspicious about the intended destination of the hardware on order.
According to the DOJ, the conspiracy began as early as May 2023. English allegedly ordered 750 servers for approximately $170 million from Company-1 (Supermicro) in October that year, claiming to act on behalf of a Thai client. Of those servers, 600 contained GPUs on the US Commerce Department's control list and required a license for export to China. In doing so, English signed a form certifying the servers were not destined for any country on the control list.
When English asked Supermicro to add Zheng and Kelly to an email thread regarding the order, the tech giant noted Zheng's company was based in China, while no one from the purported Thai customer was included, the DoJ claims.
"The California-based manufacturer of the computer chips" (Nvidia) reviewed the order, but it couldn't verify the ultimate buyer for its products in Thailand and the purchase was not completed.
Another alleged attempt by English to obtain 500 GPU servers while claiming to act on behalf of a different Thailand-based company was also unsuccessful.
The DOJ says text messages between the three, obtained as part of the investigation, discussed the market value of Nvidia's products in China, indicating they were aware it was the intended destination.
The trio are in custody, and Zheng has already appeared before a judge in the Northern District of California. However, the DOJ stresses that charges are merely accusations at this point, and the defendants are presumed innocent unless a court case determines otherwise. ®