By Rajwa Quasim
A Taiwan-based Nvidia employee has been charged along with eight other people over an alleged scheme to illegally export advanced AI chips to Chinese customers, marking the first known crackdown on the black-market trade in such exports.
Taiwan’s Keelung District Prosecutors’ Office said the group was involved in the shipment of 130 high-end AI servers containing Nvidia’s advanced chips. Of the 130 servers, 74 were ultimately shipped to China, while Taiwan customs authorities intercepted the remaining 56. The Nvidia employee, identified by his surname, Zhang, allegedly organized the shipment of servers containing high-end B300 chips to China via Japan and Indonesia with others, circumventing U.S. trade restrictions.
The Keelung District Prosecutors’ Office said in a statement on Monday, “The group ‘colluded vertically and horizontally for exorbitant profits, illegally exporting high-end servers, increasing corporate compliance costs and severely damaging Taiwan’s international image.’”
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Other people charged include employees of server maker Super Micro Computer, a Taiwanese distributor and other intermediaries. Meanwhile, Super Micro Computer said, “The company continues to cooperate with Taiwan authorities, is not a target of their investigation and has not been accused of any wrongdoing.”
Washington has imposed strict controls on the export of advanced semiconductors and AI computing technology to China, citing national security and potential military applications. This has forced Nvidia to adjust which products it can sell in the Chinese market, while China has encouraged domestic companies to reduce their reliance on U.S. technology.
The restrictions have also contributed to the growth of a lucrative black market, where advanced AI chips can reportedly be sold for double or even triple their original prices.
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Zhang allegedly helped obtain an allocation of servers and took part in an inspection of the data center where the equipment was supposedly going to be used. According to prosecutors, Zhang intentionally concealed the fact that the data center buyer lacked sufficient financial resources and that the money used to purchase the servers came from a Chinese company. Prosecutors have asked the court to impose the maximum five-year prison sentence on Zhang and three other defendants, while recommending shorter sentences for the remaining five defendants.
A Nvidia spokesperson said, “Our employees have every incentive to work diligently with customers to ensure compliance with all applicable laws. We will work with the Taiwan authorities to help them resolve the allegations as quickly as possible.”
Zhang was first detained in July. A Nvidia spokesperson said at the time, “We primarily sell our products to well-known partners, including OEMs, who help us ensure that all sales comply with U.S. export control rules.”