January 1, US Charges Reveal Billion-Dollar Smuggling Scheme for Advanced Chips

Wyatt’s Take

Federal authorities just uncovered a massive betrayal of American industry and national security. A senior executive from Super Micro Computer allegedly led a scheme to smuggle billions of dollars in high-tech servers to China.

These servers contained powerful Nvidia chips that are essential for developing artificial intelligence. This technology is the modern equivalent of the nuclear arms race, and we cannot afford to let our rivals steal it.

• Three men were charged for diverting $2.5 billion in equipment to China using fake documents.
• The plot bypassed U.S. export laws designed to keep our most advanced secrets out of communist hands.
• A senior vice president and a contractor were arrested while a third suspect remains a fugitive.

U.S. Attorney Jay Clayton stated that these types of schemes pose a direct threat to our national security.

The suspects reportedly used a pass-through company in Southeast Asia to hide who was actually buying the gear.

“The defendants used fabricated documents, staged bogus equipment to pass audit inventories and utilized a pass-through company to conceal their misconduct.”

said FBI Assistant Director James C. Barnacle Jr.

Super Micro Computer claims it is cooperating with the government and that these actions violated company policy.

Nvidia also released a statement saying they work closely with the government to ensure their chips do not end up in the wrong hands.

Last year, the Trump administration began a program to allow some lower-tier chip sales in exchange for a 15% commission paid to the U.S. government.

However, these smuggled high-end servers go far beyond what is legally allowed for export.

Wyatt Matters

Working-class Americans understand that our national strength depends on keeping our best technology here at home. Selling out our country for a quick buck in Beijing is a slap in the face to every citizen who wants a secure future.