Taiwanese prosecutors in the port city of Keelung indicted nine people on Tuesday over the illegal export of high-end AI servers to China, among them an employee of Nvidia's Taiwan unit and two employees of Supermicro's, Al Jazeera reports.
Eight defendants face charges of breach of trust and document forgery. Three face embezzlement charges. Prosecutors are seeking up to five years in prison for seven of them, with lighter sentences sought for two who confessed and cooperated.
The routes described
According to the indictment, 50 servers were transshipped through Indonesia and eight through Japan, with others sent directly to China. A further 56 were seized at Taiwan's border.
Those numbers are the substance of the case, and they describe how export controls are typically circumvented. Restricting a sale to a destination does not restrict it to an intermediary, so hardware is shipped somewhere permitted and forwarded from there. That is why document forgery appears in the charges alongside the export offence: the paperwork has to say the goods are going somewhere they are not.
What the companies say
Nvidia said its employees have "every incentive to work diligently with customers to ensure compliance with all applicable laws." Supermicro said: "The Company continues to cooperate with Taiwan authorities, is not a target of their investigation and has not been accused of any wrongdoing."
Both statements are worth reading precisely. Neither company is charged. The individuals indicted are employees of their Taiwanese units, and the allegations include breach of trust and embezzlement, which are offences against an employer rather than on its behalf. On the prosecution's own account, these are people accused of acting against the companies they worked for.
Why Taiwan is prosecuting
The United States restricts exports to China of the advanced chips Nvidia designs for AI systems. Taiwan, where most of those chips are manufactured, has tightened its own export controls to stop the technology reaching China.
That is the structure of the whole enforcement problem: American rules, Taiwanese manufacturing, Chinese demand, and a chain of intermediaries in between. A prosecution in Keelung is where those three things meet.
What we could not establish
We could not establish the value of the servers, the dates of the alleged shipments, the identities of the six other defendants, which customers received the hardware, or when the trial will be held. We verified this account from a single publication, and all allegations described are the prosecution's.
