Super Micro Computer stock is collapsing today. Investors flee as DOJ charges cofounder in AI China scheme

Shares in Super Micro Computer (Nasdaq: SMCI) are falling off a cliff this morning after news that the U.S. Department of Justice (DOJ) has charged the company’s cofounder and two other associates with conspiring to deliver restricted AI technology to China.

Here’s what you need to know.

What’s happened?

On Thursday, the U.S. Attorney’s Office for the Southern District of New York announced that it was charging three men with ties to Super Micro Computer (aka Supermicro) for export-control violations related to AI technology.

The three individuals, the DOJ alleges, conspired “to divert high-performance computer servers assembled in the United States and [integrated] sophisticated U.S. artificial intelligence technology to China.”

The DOJ’s indictment did not specifically name Supermicro as the company that the men worked for, but listed one of the alleged conspirators as Yih-Shyan Liaw, who cofounded the server maker more than 30 years ago and currently sits on the company’s board of directors.

Another of the two men was a direct employee of Super Micro Computer, and the third was a contractor.

In a brief statement, Supermicro confirmed that the three individuals named in the indictment were connected to the company and that the two who are employees have been placed on administrative leave, while the contractor was fired.

The DOJ alleges that for several years, the three individuals sent “massive quantities of servers with controlled U.S. artificial intelligence technology” to China via a scheme in which Supermicro’s servers were first shipped to an unnamed Southeast Asian company, where they were repackaged and sent on to China.

The DOJ does not specify which restricted AI technology was sent to China under the scheme, but the Wall Street Journal reports that the servers contained AI chips made by Nvidia, which are subject to tight export controls due to national security concerns.

A significant portion of Supermicro’s business involves manufacturing servers with Nvidia’s most powerful AI chips inside.

How have Supermicro and Nvidia responded?

Super Micro Computer issued a brief statement confirming that the three individuals alleged to have taken part in the scheme were connected to the company, confirming that the individuals were a member of the company’s board of directors, a sales manager, and a contractor.

“Supermicro has placed the two employees on administrative leave and terminated its relationship with the contractor, effective immediately,” the company stated. “The conduct by these individuals alleged in the indictment is a contravention of the Company’s policies and compliance controls, including efforts to circumvent applicable export control laws and regulations.”

The company also emphasized that it was not named as a defendant in the DOJ’s indictment and that it “has been cooperating fully with the government’s investigation and will continue to do so.”

While Nvidia was not named in the indictment, a company spokesperson issued a brief statement (via Reuters), saying it continues to work closely with the government and its customers to comply with export regulations.

“Unlawful diversion of controlled U.S. computers to China is a losing proposition across the board—NVIDIA does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective,” the spokesperson said.

How has SMCI stock reacted to the news?

Horribly. As of the time of this writing, in premarket trading, SMCI shares are down nearly 27% to $22.56 apiece. Yesterday, the company’s share price closed at $30.79.

That massive drop represents one of the steepest one-day drops the company’s shares have experienced.

Of course, the question remains why the company’s shares are dropping so precipitously given that Supermicro is not named as a defendant.

The most likely reason for the dramatic fall in SMCI stock is that investors are still digesting the news, and that news is leading to fears there may be more governmental scrutiny of the company and its operations in the months ahead, which could impact the company’s operations or revenues.

With today’s stock price fall, SMCI shares have now given up all of their 2026 gains and are now firmly in the red.

Over the past 12 months, SMCI shares have now lost more than half of their maximum value. In July 2025, SMCI shares were trading at above $62 each.

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