DOJ Probes Alice Huang in Supermicro Smuggling Case: Nvidia Faces Antitrust
The Justice Department is probing whether entities tied to Alice Huang helped smuggle Supermicro products to China, as Nvidia faces an antitrust inquiry.
Image: Wikimedia Commons / Gregory Varnum, CC BY-SA 3.0
WASHINGTON — The Justice Department is investigating whether entities linked to Alice Huang helped smuggle products made by Super Micro Computer into China, widening the federal fallout from the scandal that ended Jensen Huang's 33-year run as chief executive of Nvidia on Thursday.
The previously unreported inquiry is led by the United States Attorney's office in Manhattan, a person familiar with the matter said. It examines whether entities connected to Huang, a former Megaspeed executive whom American officials suspect of working for Chinese intelligence, helped move Super Micro products to China in breach of export controls.
- The Justice Department is probing whether entities linked to Alice Huang helped smuggle Super Micro products to China.
- Super Micro shares fell 12 per cent on Thursday; the company said it cooperated fully and that Megaspeed "is not, and has never been, a Super Micro customer".
- Two administration officials said the department also opened an antitrust investigation into Nvidia; no criminal charges against Nvidia or Jensen Huang are indicated.
- The inquiries follow Jensen Huang's resignation; Nvidia reports results on November 17.
What the Justice Department Is Investigating in the Supermicro Case
The Manhattan inquiry examines whether entities linked to Alice Huang were involved in efforts to smuggle Super Micro products into China, the person familiar with the matter said. It is not clear whether it is tied to chip-smuggling cases prosecutors have already brought, and no charges have been announced.
In March, prosecutors charged Super Micro co-founder Yih-Shyan "Wally" Liaw and two others with an alleged scheme to divert about $2.5 billion of servers containing Nvidia chips to China. Super Micro was not charged and says it was a victim. The company said on Thursday it has cooperated with American and Taiwanese officials, and that Megaspeed "is not, and has never been, a Super Micro customer". Megaspeed denies diverting chips to China.
Is Nvidia Facing a Separate DOJ Antitrust Investigation?
Separately, two administration officials said the Justice Department has opened an antitrust investigation into Nvidia. Two further inquiries cover Megaspeed and Super Micro, with investigators examining Alice Huang's role in both. No criminal charges against Nvidia or Jensen Huang are indicated.
Super Micro shares tumbled 12 per cent on Thursday. Nvidia shares closed down 6.5 per cent at $162.31 after falling as much as 12 per cent in early trading.
Jensen Huang resigned on Thursday, effective immediately; chief financial officer Colette Kress is interim chief executive. See Jensen Huang Resigns as Nvidia CEO: Second Affair, Successor and Singapore Bars Alice Huang From Re-Entry After Nvidia Spy Probe.
What Happens Next for Nvidia, Supermicro and the Huang Inquiries
Senator Michael Bennet has asked four senior administration officials for an update on the Megaspeed investigation by November 24. Senators have separately pressed the Commerce Department over Nvidia chip exports. See Senators Press Lutnick on Nvidia Chip Exports: Letters and CXMT Ban Call.
| Inquiry | Focus | Status |
|---|---|---|
| Manhattan United States Attorney | Alice Huang-linked entities and Super Micro smuggling | Under way; no charges |
| Justice Department antitrust | Nvidia business practices | Opened; no criminal charges indicated |
| Export inquiries | Megaspeed and Super Micro | Under way; both deny wrongdoing |
Nvidia reports third-quarter results on November 17, when Kress faces investors for the first time since the resignation.
Frequently Asked Questions
Is the Justice Department investigating Alice Huang over Supermicro products?
Yes. The Manhattan United States Attorney's office is examining whether entities linked to Huang helped smuggle Super Micro products to China. No charges have been announced, and it is not clear whether the inquiry is tied to cases prosecutors have already brought.
Did Supermicro sell products to Megaspeed?
Super Micro said Megaspeed "is not, and has never been, a Super Micro customer". The company said it cooperated with American and Taiwanese officials, and Megaspeed denies diverting chips to China.
Is Nvidia facing criminal charges from the Justice Department?
No. Two administration officials said the department opened an antitrust investigation into Nvidia, with separate inquiries covering Megaspeed and Super Micro. No criminal charges against Nvidia or Jensen Huang are indicated.
How much did Supermicro stock fall after the DOJ probe report?
Super Micro shares fell 12 per cent on Thursday after the report of the Justice Department inquiry. Nvidia shares closed down 6.5 per cent at $162.31 the same day.
