Sources told the publication that the company made this move after Washington pressured it into tightening its legal compliance, which comes months after the arrest of Supermicro co-founder Yih-Shyan “Wally” Liaw , alongside two other suspects, for allegedly smuggling $2.5 billion worth of Nvidia hardware into China. This clampdown also extended into Singapore, which saw the seizure of a $42-million mansion tied to alleged AI GPU smugglers , and Taiwan, where authorities raided the offices of Supermicro and two supply-chain partners as part of a chip smuggling probe. Nvidia was not immediately available for comment on the news.
Although the U.S. has banned the latest AI GPUs for export into China since 2022, various investigations showed Chinese companies could still easily get their hands on these coveted chips until recently. Washington’s and its allies’ crackdown on AI GPU smuggling have cut supply in China, which is now making it harder for AI companies to procure the processors they need. President Donald Trump took a 180-degree turn in December 2025 and finally allowed Nvidia to export its H200 GPUs to select customers in the region, which would have alleviated the situation. However, Beijing refused to allow Chinese companies to buy these AI processors — instead, it’s banking on domestic semiconductor manufacturers to make up for the shortfall, but it’s apparently still not enough. One tech executive even told the Financial Times that all domestic suppliers are sold out and that they’re even considering less powerful chips, as long as they could be put to use.
As Nvidia reportedly cleaned up its verified list of clients and made it harder for non-vetted companies to acquire its chips, the company has also told its partners to fix their export control compliance. “We insist our partners are compliant,” Nvidia CEO Jensen Huang told the media last May after Taiwan started its operations against AI chip smuggling into China . “We hope that they will enhance and improve their regulation compliance and prevent that from happening in the future.”
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After $2.5 billion Supermicro smuggling bust, Nvidia CEO urges company to fix export control compliance
Chinese military has been acquiring Nvidia chips, even post-Washington export controls, research claims
US closes loophole that allowed Chinese-owned subsidiaries located outside China to buy AI chips
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