Massive $2.5B smuggling case exposes loopholes in US AI chip ban

Federal prosecutors charged Yih-Shyan Liaw, a Supermicro co-founder, and two others with smuggling about $2.5 billion in Nvidia-equipped servers to China.

Investigators say brokers routed legitimate orders through a Southeast Asian pass-through and relabeled shipments to bypass US export controls.

The case highlighted enforcement gaps in US restrictions on advanced AI chips and prompted calls in Washington to tighten export rules.