The fallout from Jensen Huang's resignation widened Thursday, from a CEO scandal into the hardware supply chain. The Justice Department is probing whether entities linked to Alice Huang — the woman U.S. officials suspect of ties to Chinese intelligence — were involved in efforts to smuggle Super Micro products into China, Bloomberg reported, citing a person familiar with the matter.
The previously unreported inquiry is being led by the U.S. Attorney's office in Manhattan. It remains unclear whether it is connected to chip-smuggling cases prosecutors have already brought, or what role Huang or entities linked to her may have played — and, as Bloomberg noted, DOJ investigations can conclude without charges.
It is one of three probes now circling Nvidia's orbit. According to Semafor, citing two administration officials, the department has also opened a separate antitrust investigation into Nvidia itself, alongside inquiries into Super Micro and Megaspeed International, the Singapore firm where Alice Huang was an executive. There is no indication the DOJ would seek criminal charges against Nvidia or Huang, and Bloomberg reported that the former CEO is not a target of U.S. law enforcement investigations.
The market did not wait for clarity. Super Micro shares fell more than 12% on Thursday, Stocktwits reported, closing down 11.3% at $26.99, according to Insider Monkey. Nvidia closed down 6.5% at $162.31 on the same day its founder's 33-year run ended.
This is not Super Micro's first brush with smuggling allegations. In March, federal prosecutors charged co-founder Yih-Shyan "Wally" Liaw and two others over an alleged scheme to divert about $2.5 billion in Nvidia-powered servers — H200 and B200 machines — to Chinese customers through a Southeast Asian front company. Liaw pleaded not guilty and is no longer with the company, which was not named as a defendant. In August, Super Micro said an independent investigation found no evidence that current senior management knew of the alleged diversion, and the company says it is cooperating with authorities.
The net is widening on the other side of the Pacific, too. Singapore's Ministry of Home Affairs said Thursday that its police and customs agencies have opened investigations into Megaspeed and Alice Huang and have requested information from Super Micro, Engadget reported. Alice Huang has been barred from re-entering Singapore after police determined she knowingly offered inaccurate information to downplay her role at Megaspeed. Megaspeed has denied wrongdoing.
What comes next is a two-track test. Nvidia reports quarterly results on November 17, the first time interim CEO Colette Kress faces investors since the resignation — and Huang has agreed to testify before Congress this month behind closed doors. The question for the industry is whether the smuggling trail ends with individuals, or reaches the companies that built the hardware the AI boom runs on.
— via Bloomberg