Super Micro shares tumble as DOJ probes widen to Nvidia

Super Micro Computer shares fell more than 10% on Thursday, November 12, after Semafor reported that the U.S. Justice Department is running several investigations that threaten to sweep up Nvidia ↘ 2.01%. One of those inquiries targets the server maker directly. The report came hours after Jensen Huang resigned as Nvidia's chief executive, and two days after new questions surfaced about how Super Micro servers carrying Nvidia's most advanced chips ended up in use by China's Moonshot AI.semafor.com

Three separate inquiries

Citing two administration officials, Semafor reported that the department has three probes under way. One is an antitrust investigation aimed at Nvidia itself. The other two focus on Super Micro and Megaspeed, a Singapore-based company, and have centered on the role of Alice Huang, whom U.S. officials allege is a Chinese spy and with whom Jensen Huang admitted having an extramarital affair before he resigned. Semafor said there was no indication the DOJ intends to bring criminal charges against Nvidia or Huang at this time. Nvidia and the DOJ declined to comment, and Super Micro did not immediately respond. Investing.com noted that the probes are separate and that Semafor did not establish that Nvidia is implicated in the allegations involving Alice Huang.investing.com+1

Nvidia shares also fell in Thursday's session. Earlier that day, the company announced that Huang had stepped down as president, CEO and board member, effective immediately, and that CFO Colette Kress would serve as interim chief executive. According to Reuters, U.S. authorities have concluded that Alice Huang, a former Megaspeed executive, was a Chinese intelligence asset. Beijing denies that she is a spy.investor.nvidia.com+1

The Moonshot rental

Scrutiny of Super Micro had already been building. On Tuesday, Bloomberg reported that in August, Moonshot AI signed a contract to rent 32 Super Micro servers fitted with Nvidia's B300 GPUs. Filings with Beijing regulators valued the servers at 432 million yuan and placed them in China, which points to a possible breach of U.S. export rules. The servers are owned by a Beijing firm called Lingmeixin, and Moonshot disputed that the documents are accurate. A Super Micro spokesperson said the company "does not conduct business with these entities" and is "committed to complying with all applicable US export and re-export control laws and regulations". Super Micro's stock also fell on Tuesday after that report.finance.yahoo.com+3

A lingering exposure

The new reports add to legal trouble Super Micro already faced. In March, federal prosecutors charged co-founder Yih-Shyan "Wally" Liaw and two others with routing about $2.5 billion worth of servers containing Nvidia chips to China through a front company in Southeast Asia. That indictment did not accuse Nvidia of wrongdoing. In August, an independent probe commissioned by the company concluded that current senior management "had no knowledge of the purported scheme". Nvidia is scheduled to report third-quarter results on November 17.aiweekly.co+2