A senior Nvidia executive faces up to five years in prison amid allegations of orchestrating unauthorized AI chip shipments to China.
Taiwanese prosecutors have indicted a senior Nvidia manager over his alleged involvement in a scheme to smuggle advanced AI servers into China. Marking the first known criminal case in Taiwan involving an Nvidia employee accused of participating in the black-market trade of AI hardware, the indictment centers on 74 Nvidia B300-equipped systems and could result in a five-year prison sentence for the alleged mastermind.
According to people familiar with the case cited by Bloomberg, the Nvidia employee, identified only by his surname Chang, allegedly coordinated with eight others to route the servers through Japan and Indonesia. An additional 56 servers were prepared for shipment but were seized by Taiwanese authorities before they could be exported to Japan using what prosecutors described as false documentation.
The indictment alleges that the group utilized companies in Japan and Taiwan to obscure the hardware’s final destination and circumvent U.S. export restrictions. To create the appearance of legitimacy, the defendants fabricated paperwork suggesting that “Flying Tiger,” the purported end user, had adequate capacity at a Taiwanese data center to receive the equipment. Prosecutors state that both Nvidia and Supermicro employees participated in inspecting the facility. Following the inspection, Chang informed Nvidia executives that the review was complete, enabling the order to proceed. Supermicro subsequently agreed to sell 130 servers to Flying Tiger, which were delivered across three separate batches.
After delivery, the defendants allegedly arranged for 40 of the servers to be sold to a Chinese customer, with some shipped directly to mainland China and others routed through Indonesia. Another 34 servers were dispatched via Indonesia and Japan to a second Chinese firm.
In addition to Chang, Taiwanese authorities have indicted two senior Supermicro employees, who manufactured the servers, along with senior personnel from four other companies allegedly responsible for reselling the hardware, securing Chinese buyers, and coordinating logistics. Supermicro has stated it is fully cooperating with Taiwanese investigators and confirmed it is not a target of the probe. Nvidia itself faces no allegations of wrongdoing. Following Chang’s initial detention in July, the company issued a statement emphasizing that “smuggling is a nonstarter,” noting that it primarily distributes its products through established partners designed to ensure strict adherence to U.S. export control regulations.
Prosecutors are seeking a five-year sentence for Chang, whom they identify as the central figure in the operation. He faces charges of forgery and breach of trust, though the allegations remain unproven in court.
The case underscores the escalating challenges Washington faces in enforcing U.S. restrictions on the export of advanced AI chips to China. Despite ongoing controls, Chinese firms have persistently acquired Nvidia hardware through intermediaries and illicit channels. U.S. officials have previously estimated that billions of dollars’ worth of Nvidia equipment has successfully reached China through these networks.