US probes Alice Huang links to Super Micro smuggling

Federal prosecutors in Manhattan are examining whether entities linked to Alice Huang, the businesswoman US officials suspect of spying on former Nvidia CEO Jensen Huang, helped smuggle Super Micro Computer ↘ 10.65% products into China, Bloomberg reported on Thursday, citing a person familiar with the matter. Super Micro shares fell 12% after the report, according to Investing.com.bloomberg.com+1

The report came out on the same day Jensen Huang resigned, and it widens the legal exposure tied to the scandal. Bloomberg said it is unclear whether the inquiry is tied to any of the chip smuggling cases US or Asian prosecutors have already brought.bloomberg.com

What is known about the probe

The scrutiny is being led by the US attorney's office in Manhattan and had not been reported before. It also remains unclear what role, if any, Alice Huang or her entities played in the alleged smuggling, and Justice Department investigations sometimes end without charges, Quartz reported, citing Bloomberg. The department is separately investigating Megaspeed International, Huang's former company, on suspicion of semiconductor smuggling. Megaspeed has denied wrongdoing. Bloomberg reported that Alice Huang lives in Beijing and that it could not reach her. Super Micro, the Justice Department and the Manhattan US attorney's office declined to comment.qz.com

Semafor separately reported that the department has several investigations that could draw in Nvidia, including an antitrust probe and inquiries into Megaspeed and Super Micro that have focused on Alice Huang's involvement. Jensen Huang is not a target of law enforcement probes, and the two Huangs are not related.investing.com+1

Fallout at Nvidia

Nvidia's board said on Thursday that Huang had resigned as president, CEO and director, effective immediately. Chief Financial Officer Colette Kress was named interim CEO. He stepped down after reports that he had an affair with Alice Huang, a former Megaspeed executive whom US authorities have concluded was a Chinese intelligence asset. Beijing denies that she is a spy. The New York Times ↘ 0.85% also reported on Wednesday that he had a second affair, with Nvidia healthcare vice president Kimberly Powell.investor.nvidia.com+2

Earlier Super Micro case

In March, Manhattan prosecutors charged Super Micro co-founder Yih-Shyan "Wally" Liaw and two others over an alleged scheme to send Nvidia-powered servers to a Southeast Asian intermediary and then divert them to China. Co-defendant Ting-Wei "Willy" Sun pleaded guilty to four counts in October. Liaw pleaded not guilty and has left Super Micro's board. Super Micro is not a defendant. In August, the company said none of its current senior leaders knew about the scheme and that it is cooperating with investigators.qz.com