Supermicro employees arrested for smuggling GPUs to China
The Department of Justice arrested several Supermicro employees, including co-founder Wally Lior, for smuggling GPUs to China. Skeptics note that AI servers are still reaching Chinese labs, raising questions about the effectiveness of the arrests.
In March, the Department of Justice arrested several Supermicro employees, including co-founder Wally Lior, for GPU smuggling. Lior, who was fired from Supermicro in 2018 over an accounting scandal, was rehired as a consultant in 2021 and added to the board in 2023. He was photographed with Nvidia CEO Jensen Huang at GTC 2026 shortly before his arrest. The smuggling operation allegedly used a hairdryer to move serial numbers to dummy servers and sold GPUs to China through a pass-through entity called OBON Corporation. Culper Research suspects OBON is a subsidiary of Megaspeed. Bloomberg reported that a few hundred Supermicro AI servers were used to train the latest model from Chinese AI lab Moonshot, raising questions about how the hardware reached China despite the arrests. Zitron expressed skepticism about the effectiveness of the arrests, noting that servers are still reaching China and implying that Supermicro may still be involved in the smuggling network.