Super Micro’s shares plummeted by 28% on Friday after U.S. prosecutors indicted three individuals connected to the company, including its co-founder, for allegedly smuggling billions of dollars worth of artificial intelligence technology to China.
American prosecutors did not name Super Micro – a major AI server manufacturer using Nvidia chips – in the complaint. The company confirmed it was not named as a defendant in the case and was cooperating with investigators.
The drop in shares could wipe out over $5 billion from Super Micro’s market value, which currently stands at $18.49 billion, if it persists. Melius Research analysts stated that Super Micro’s revenue could be at “huge” risk as customers reassess their exposure to suppliers, adding that they view Dell as the primary beneficiary due to its size and closer ties with Nvidia. Dell’s shares rose by 6%.
The U.S. Department of Justice accused Super Micro’s co-founder Yih-Shyan Liaw, sales director Ruei-Tsang Chang, and entrepreneur Ting-Wei Sun of establishing a system to route servers manufactured in the U.S. to Southeast Asia through Taiwan, where the products were repackaged in unmarked boxes and clandestinely taken to China.
They allegedly smuggled at least $2.5 billion worth of American AI technologies, including over half a billion dollars shipped between April and mid-May 2025, according to the ministry.
Super Micro has placed employees on leave and terminated its relationship with the entrepreneur.
The U.S. imposed export controls on chips in 2022 to ensure Beijing’s military would not benefit from their technology and to slow China’s AI development efforts.
“Investors would consider the potential risks that could lead to at least additional investigations, audits, costs, negative reputation, customers avoiding potential review, and Nvidia further favoring other server manufacturers,” said Hendi Susanto, portfolio manager at Gabelli Funds, which holds a stake in Super Micro.
The surge in demand for AI chips drove Super Micro’s value to $67 billion in 2024, but margin pressure related to server building and allegations from now-dissolved short seller Hindenburg have since lowered the share price.
