NVIDIA Employee Arrested in Taiwan for Allegedly Smuggling AI Servers to China - Vision Times
The case involving the alleged smuggling of Supermicro AI servers equipped with high-end NVIDIA chips into China has made another significant breakthrough. Prosecutors have found that an insider at NVIDIA was. . .
The case involving the alleged smuggling of Supermicro AI servers equipped with high-end NVIDIA chips into China has made another significant breakthrough. Prosecutors have found that an insider at NVIDIA was allegedly involved. Zhang Denglong, a senior business manager at the company, is accused of forging documents to conceal the transshipment of AI servers to mainland China, Hong Kong, and Macau. After questioning Zhang, prosecutors concluded that there is strong suspicion of criminal wrongdoing and concerns that he could flee or destroy evidence. They therefore requested that the court order his detention without communication, which the court approved. NVIDIA insider arrestedTaiwan’s Keelung District Prosecutors Office conducted a second round of searches involving publicly listed AOpen Inc. and Supermicro, Taiwan’sLiberty Timesreported on June 29. Prosecutors questioned AOpen General Manager Lu, Supermicro Sales Manager Wang, and three Supermicro sales employees surnamed Lin, Wang, and Chu. Investigators said all five were suspected of offenses including document forgery. The court ordered the detention without communication of AOpen’s General Manager Lu and two Supermicro employees, surnamed Lin and Wang, citing concerns that they might flee or collude with others. Another Supermicro sales manager surnamed Wang and sales employee surnamed Chu were released on bail of NT$100,000 and NT$50,000, respectively. SIGN UP FOR OUR FREE NEWSLETTERFor the best of our weekly content！There is something wrong, please try again laterSuccessYou are now signed up for our newsletterSuccessCheck your email to complete sign upOn July 24, the Keelung District Prosecutors Office searched NVIDIA’s offices and the residence of business manager Zhang Denglong. Following further questioning, prosecutors determined that Zhang was strongly suspected of criminal conduct and posed a risk of fleeing, destroying evidence, or colluding with accomplices and witnesses. They successfully petitioned the court to detain him without communication. To date, seven defendants have been ordered detained in connection with the case. According toMirror Weekly, the reason AI servers equipped with NVIDIA’s B300 chips were able to make their way into China was that NVIDIA insider Zhang Denglong allegedly colluded with several defendants, including Supermicro sales manager Wang Xiangyi, who is currently in detention. Investigators found that Zhang Denglong attended the 2023 inauguration of the National Tsing Hua University–NVIDIA Joint Innovation Center alongside Qiu Liemeng, then NVIDIA’s global vice president and Taiwan general manager. His prominent role at the event indicates that he likely held a senior and influential position within NVIDIA. Evidence indicates that although Zhang knew AI servers assembled by Supermicro and equipped with NVIDIA’s B300 chips were prohibited from being sold to China, he allegedly forged documents to deceive government export-review authorities into approving their export. The smuggling operation followed a scheme described as “legitimate orders, fake domestic use, real resale. ” Those involved allegedly used shell companies to place orders with Supermicro distributors for AI servers equipped with B300 chips. They then rented data center space from Chief Telecom (Chief Telecom Inc. ) to create the appearance that the servers would remain in Taiwan for domestic use. After inspections by NVIDIA, Supermicro, and the distributors were completed, the equipment was allegedly removed immediately, exported under the pretense of being shipped to Japan, and then transshipped through Hong Kong into mainland China. The smuggling ring had been operating under this model for three years, generating an estimated US$300 million in illicit profits. READ MORE:Taiwan Busts Alleged Underground Network Smuggling Nvidia AI Servers to ChinaChina’s Reported Mass Production of DUV Lithography Machines Raises Alarm; Taiwan Stocks Plunge 2,030Fate of Supermicro sales manager Zhang Ruicang remains unknownAccording toMirror Weekly, U. S. authorities uncovered the alleged smuggling of Blackwell-architecture AI servers equipped with Nvidia B200 chips into China in 2025. In March 2026, the U. S. Attorney’s Office for the Southern District of New York charged Supermicro co-founder Liao Yixian, Taiwan sales manager Zhang Ruicang and partner-company employee Sun Tingwei with offenses including violating export controls and smuggling. Liao and Sun have appeared before authorities, while Zhang’s whereabouts remain unknown. Because Taiwanese nationals were implicated, authorities in Taiwan opened a parallel investigation. The case gained momentum after Coast Guard officers investigating suspected gang-related drug smuggling noticed repeated references to “B300” in suspects’ communications. Investigators initially believed the term referred to a drug, but later determined that it referred to Nvidia’s high-end AI chips. On May 20, the Keelung District Prosecutors Office launched its first round of searches and questioning. Investigators subsequently intercepted 50 Supermicro AI servers equipped with Nvidia B300 chips that were allegedly intended for shipment to China. Taiwanese investigators are tracing Zhang Ruicang’s communications and financial transactions. Mirror Weekly reported an unconfirmed rumour that Zhang fled to China after earning NT$1 billion from the scheme and was later killed by organized crime figures. Prosecutors are continuing their investigation in an effort to establish the facts before evidence is lost. The NVIDIA logo is seen near a computer motherboard in this illustration taken Jan. 8, 2024. (Image: REUTERS/Dado Ruvic/Illustration/File Photo)China’s AI industry highly dependent on NVIDIA’s computing powerMirror Weekly, citing unidentified sources familiar with the investigation, reported that the alleged smuggling route differed from earlier cases uncovered by U. S. authorities, in which restricted AI hardware was routed through Singapore and Malaysia before reaching China. The new case suggests that those seeking to obtain NVIDIA’s advanced AI chips for China have resorted to increasingly sophisticated methods, allegedly with assistance from individuals based in the United States, Taiwan, and Japan. Sources further claim that, driven by strong demand on the Chinese black market, the price of an NVIDIA DGX B300 server in China has surged to around US$1. 1 million—roughly twice its official U. S. retail price. This is said to reflect both Chinese companies’ willingness to pay substantial premiums and the extent to which China’s AI development relies on NVIDIA’s high-performance computing capabilities. As the investigation continues to expand, authorities have not ruled out the possibility that additional accomplices remain at large. Given the alleged involvement of an NVIDIA employee, the case is considered highly sensitive. As a result, prosecutors, police, and investigators have conducted the investigation with an unusually low profile. Unlike the previous two enforcement actions, authorities did not proactively issue a public announcement regarding this latest operation, instead choosing to remain silent.