A SMC contractor has admitted to illegally exporting NVIDIA chips to China.

A contractor associated with Super Micro Computer has pleaded guilty to illegally exporting advanced NVIDIA AI chips, contained in computer servers, to China.

The plea was entered on Thursday in the US District Court in Manhattan, according to court documents. The alleged scheme, which began around 2024, used a Southeast Asia-based company as a pass-through entity to conceal the China-based end customers.

In March, US prosecutors charged Ting-Wei "Willy" Sun and two other Super Micro associates with conspiring to divert some $2.5 billion worth of US AI technology to China in violation of export laws. The indictment specifically noted that NVIDIA's B200, H100 and H200 graphics processing units (GPUs), along with servers containing them, are on the Commerce Control List and subject to restrictions due to national security concerns.

The case highlights the growing US-China rivalry in artificial intelligence (AI) technology. Both countries are investing billions of dollars in the technology for economic growth, national security, and military and cybersecurity capabilities. In response to these concerns, Washington has tightened export controls, prohibiting the export of advanced AI chips and server systems to China without a license.