U.S. authorities intensified scrutiny of AI chip supply chains after prosecutors alleged that a Thailand-linked network diverted Super Micro Computer, Inc. (NASDAQ:SMCI) servers containing advanced NVIDIA Corp. (NASDAQ:NVDA) chips to China, with Alibaba Group Holding Limited (NYSE:BABA) identified as one of several alleged end customers.
U.S. Probe Targets Alleged AI Chip Diversion Network
U.S. prosecutors alleged that Super Micro co-founder Yih-Shyan “Wally” Liaw worked with a Southeast Asian company and multiple third-party brokers to divert NVIDIA-powered AI servers to China in violation of U.S. export restrictions, Bloomberg reported on Friday.
People familiar with the matter identified the unnamed company in the indictment as OBON Corp., a Bangkok-based company.
According to those people, some of the $2.5 billion worth of servers sold to OBON ultimately reached Alibaba.
The indictment itself does not name either OBON or Alibaba, and U.S. authorities have not publicly accused either company of wrongdoing.
The March indictment triggered a sharp selloff in Super Micro shares and marked the largest crackdown tied to alleged AI chip smuggling since Washington imposed restrictions on NVIDIA chip exports to China in 2022.
NVIDIA, Super Micro And Regulators Respond
The allegations renewed concerns about oversight across NVIDIA’s AI hardware ecosystem, especially in Southeast Asia.
NVIDIA said its partners must maintain strict compliance with export-control regulations and noted that its diligence efforts have helped authorities pursue suspected smuggling operations.
Super Micro launched an internal investigation, placed Liaw on administrative leave, and said the company remains committed to complying with U.S. export laws.
U.S. authorities alleged that Super Micro temporarily paused shipments to Company-1 after internal audits flagged unusual sales activity.
The Commerce Department’s Bureau of Industry and Security later requested a hold on all shipments to the company, and that restriction remained active as of the March indictment.
Washington’s export restrictions on NVIDIA chips and the broader crackdown on smuggling have sharply disrupted China’s AI hardware market, driving up server prices, tightening supply, and reshaping competition among semiconductor players.
NVIDIA Server Prices Surge In China
Chinese tech firms now reportedly pay around $1 million for NVIDIA B300 servers, nearly double the roughly $550,000 price in the U.S., due to export controls and reduced gray-market supply.
Buyers unable to afford direct purchases have increasingly shifted toward rentals, with some one-year contracts reportedly reaching 190,000 yuan per month.
Smuggling Crackdown Tightens Supply
The B300 server is not officially available in China, and NVIDIA said partners must comply with strict export regulations while warning that diverted systems would not receive company support.
The gray market reportedly weakened further after U.S. prosecutors charged a Super Micro-linked executive in an alleged smuggling case tied to NVIDIA hardware.
Supply pressures have also intensified because NVIDIA’s H200 chips, despite export approvals from both Washington and Beijing, have yet to reach Chinese data centers.
China’s AI Demand Continues To Climb
The restrictions come as Chinese AI adoption accelerates rapidly.
Reuters cited Morgan Stanley data showing Chinese AI models accounted for 32% of global token usage in March 2026, up from 5% a year earlier, driven by growth in coding and agentic AI applications.
Companies including MiniMax, Zhipu, and Alibaba’s Qwen reportedly recorded sixfold to sevenfold increases in token usage between December and March.
Despite the restrictions, NVIDIA still controls about 55% of China’s AI chip market, while Advanced Micro Devices, Inc. (NASDAQ:AMD) and Huawei continue trying to gain share amid the supply disruption.
Price Action: NVIDIA shares were up 1.08% at $213.78 and Super Micro Computer shares were up 1.19% at $34.02 during premarket trading on Friday, according to Benzinga Pro data.
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