Authorities have arrested three people who allegedly bypassed US export control laws to ship massive quantities of sensitive AI servers to China.
The U.S. Department of Justice (DOJ) says it is charging Yih-Shyan “Wally” Liaw, Ruei-Tsang “Steven” Chang and Ting-Wei “Willy” Sun over allegations that the trio orchestrated a scheme to smuggle billions of dollars in sensitive AI chips to China in violation of federal export control laws.
Authorities say Liaw, Chang and Sun masterminded a large-scale scheme using a Southeast Asia-based intermediary to disguise the true destination of the AI servers. The trio allegedly submitted false paperwork, rerouted shipments, repackaged equipment into unmarked boxes and even staged thousands of fake dummy servers to mislead inspections.
The operation involved roughly $2.5 billion in server purchases between 2024 and 2025, including about $510 million worth of equipment diverted to China in just a few weeks.
Says U.S. Attorney Jay Clayton for the Southern District of New York,
“As alleged in the Indictment, the defendants participated in a systematic scheme to divert massive quantities of servers housing U.S. artificial intelligence technology to customers in China.
They did so through a tangled web of lies, obfuscation, and concealment—all to drive sales and generate revenues in violation of US law. Diversion schemes like those disrupted today generate billions of dollars in ill-gotten gains and pose a direct threat to US national security.”
To protect US national security and foreign policy interests, the Department of Commerce has placed restrictions on the export and re-export of advanced AI accelerator chips and servers incorporating such chips to China and Hong Kong.
Disclaimer: Opinions expressed at CapitalAI Daily are not investment advice. Investors should do their own due diligence before making any decisions involving securities, cryptocurrencies, or digital assets. Your transfers and trades are at your own risk, and any losses you may incur are your responsibility. CapitalAI Daily does not recommend the buying or selling of any assets, nor is CapitalAI Daily an investment advisor. See our Editorial Standards and Terms of Use.