Taiwan prosecutors indict nine over illegal AI server exports to China

Prosecutors in Keelung have indicted nine individuals, including staff from NVIDIA and Super Micro, for the illegal export of high-end AI servers to China. According to reports from Reuters, the defendants are accused of colluding at various levels to secure substantial profits while circumventing strict regulatory frameworks.

The Keelung prosecutors stated that the actions taken by the defendants, who were allegedly fully aware of their employers' rigorous export control procedures, have increased corporate compliance costs. In a statement, the prosecution team noted that the illegal shipments have severely damaged Taiwan's international image.

This development occurs against a backdrop of shifting US trade policy. While the United States has banned the sale of cutting-edge AI technology from NVIDIA and other firms to China since 2022, recent policy adjustments have permitted the sale of previous-generation products, such as H200 chips, to the Chinese market.

Despite these relaxations for older models, illegal shipments of prohibited high-end servers continue to be routed through third-party countries. Previous unrelated cases have seen AI servers moved via Southeast Asian nations, including Thailand and Malaysia, to evade US export controls.

The case highlights the complex supply chain dynamics within the semiconductor industry. Although NVIDIA is an American company, most of its chips are manufactured by the Taiwan Semiconductor Manufacturing Company (TSMC). Even Blackwell chips produced in Phoenix, Arizona, are shipped to Taiwan for advanced packaging before final assembly.

Taiwan has maintained ultra-strict export controls on newer technology to avoid displeasing US regulators. This latest indictment underscores the ongoing challenge of enforcing these controls as bad actors continue to find ways to move high-value hardware into China.