Taiwan Indicts 9 in Alleged Scheme to Divert Nvidia B300 AI Servers to China

On Aug. 24, Taiwanese prosecutors unveiled that they had indicted nine people over an alleged scheme to obtain high-end Nvidia B300 AI servers under false pretenses and divert dozens of them to China. Prosecutors say the ploy generated more than NT$600 million (about USD$19 million) in illicit proceeds.

The Keelung District Prosecutors Office announced the indictments following a three-month probe. The nine defendants include a manager at Nvidia Taiwan and personnel associated with Supermicro’s Taiwanese subsidiary, as well as executives and employees of several local technology firms. Prosecutors say the group ultimately diverted 74 Nvidia B300-equipped AI servers to China before Taiwanese authorities disrupted the operation.

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How the scheme worked

According to prosecutors, the case centered on high-end servers built by Supermicro using Nvidia’s B300 GPUs. Purchasers were required to appear on an approved Nvidia customer list, and resale was prohibited. Prosecutors say Flying Tiger executives saw an opportunity to profit by reselling the systems and used industry connections to obtain approval to purchase 130 servers worth millions of dollars.

The group then enlisted employees or executives connected to Nvidia Taiwan, Supermicro Taiwan, distributor Albatron Technology and other companies to make it appear that the servers were being acquired for legitimate domestic use.

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Prosecutors say a Chunghwa Telecom-affiliated data center was used to create the appearance that Flying Tiger intended to install and operate the equipment in Taiwan. After an inspection was completed, the company secured authorization for 130 B300 servers to be delivered in three batches. When the buyer for the first shipment was unable to pay, prosecutors allege the servers were instead sold to a Chinese information technology company.

A second batch was subsequently purchased for resale to another Chinese company, with servers shipped to China either directly or through Indonesia earlier this year. A third group of eight servers was allegedly exported to a company in Japan before being rerouted to China.

Customs officials intercepted the remaining 56 servers after detecting irregularities, prosecutors said. Investigators moved in as members of the group allegedly attempted to submit falsified documentation. Authorities estimate the scheme generated more than NT$600 million in illicit profits. Two Supermicro executives also allegedly received performance bonuses exceeding NT$1 million in connection with the sales.

Prosecutors seek prison terms

Those indicted face charges including breach of trust and document forgery. Prosecutors are seeking sentences of up to five years for Nvidia Taiwan manager Zhang Denglu, Supermicro Taiwan executives Lin Changchun and Wang Xiangyi, and trader Wang Kaiping. Other defendants face requested sentences of three years.

Investigators also uncovered a separate alleged scheme in which Lin and other defendants used fraudulent invoices for server purchases to siphon nearly NT$40 million from Albatron Technology. Prosecutors are seeking a six-year sentence for Lin in connection with that case.

The latest development have brought new concerns of how advanced AI hardware continues to reach China despite increasingly tight controls surrounding cutting-edge semiconductor technology.

A technology-security threat

The case comes amid growing concern in Taiwan over Chinese efforts to obtain advanced chips, semiconductor expertise and engineering talent. According to an Aug. 24 investigation by French magazine L’Express, Chinese companies have sought to lure senior Taiwanese semiconductor engineers with salaries as high as three times prevailing market rates, while allegedly using shell companies and intermediaries to obscure their ties to China.

Taiwanese authorities say such recruitment operations can be difficult to detect because Chinese companies have used shell operations and other arrangements to obscure their identities. Taiwan’s Investigation Bureau said companies have posed as Taiwanese or foreign-invested firms, established unauthorized offices, or used employment agencies to disguise their activities. Authorities recently investigated 17 Chinese companies suspected of illegally recruiting Taiwanese high-tech workers.