Discussion
Super Micro Shares Plunge 25% After Co-Founder Charged In $2.5 Billion AI Chip Smuggling Plot
alephnerd: Oof. SuperMicro also had it's hardware supply chain compromised back in the 2010s [0][1][2][3][0] - https://www.bloomberg.com/news/features/2018-10-04/the-big-h...[1] - https://www.bloomberg.com/features/2021-supermicro/[2] - https://www.schneier.com/blog/archives/2021/02/chinese-suppl...[3] - https://www.theinformation.com/articles/apple-severed-ties-w...
progbits: Those claims were never confirmed, no? Some of it might be true or trueish but I'm not talking Bloomberg's anonymous sources word for it, and with so much supermicro gear out there you would think some other evidence would show up.
throwa356262: Didn't that turn out to be incorrect?Multiple security companies looked into this and found nothing malicious.
alephnerd: Nope. Bloomberg doubled down on it and even Bruce Schneider accepted it despite initially being a skeptic.
unsnap_biceps: I don't believe that there was ever extra chips being added to the boards, but what I could believe is that they shipped with firmware on specific chips that enabled data exfiltration for specific customers and due to a game of telephone with non technical people it turned into "they're adding chips inside the pcb layers!"
tumult: No evidence was ever presented and nobody ever found anything, as far as I can tell?
protimewaster: There was a security auditing firm that came out a few days later claiming they'd found a chip, similar to the one Bloomberg described, during a security audit.It's still nothing concrete, though. They CEO basically said that they'd found one and that they couldn't say much more about it due to an NDA.
frenchtoast8: Bloomberg's claims sound like science fiction: https://www.servethehome.com/investigating-implausible-bloom...Bloomberg's tech coverage is not great from what I've seen. Last year they published a video which was intended to investigate GPUs being smuggled into China, but they couldn't get access to a data center so they basically said we don't know if it's true or not. Meanwhile an independent Youtuber with a fraction of the resources actually met and filmed the smugglers and the middlemen brokering the sales between them and the data centers. Bloomberg responded by filing a DMCA takedown of that video.
dwa3592: https://substack.com/home/post/p-191531928
simonebrunozzi: So, good time to buy on the panic?
int32_64: Remember when Singapore buyers were an abnormally high percentage of nvidia's revenue? You have to wonder if these companies are this brazen because they know the DoJ will have political pressure not to nuke the bubble which is more important than being China hawks.
protimewaster: It depends on what you consider confirmed. It was kind of corroborated, at least. There was a CEO of a hardware security firm that came forward after the original article. He claimed that his firm had actually found a hardware implant on a board during a security audit. It wasn't exactly as Bloomberg described, though.His take was that it was very unlikely that it impacted exclusively Supermicro, though.It was covered various places, including The Register https://www.theregister.com/2018/10/09/bloomberg_super_micro...
kantselovich: I don't think it was a confirmed story. That is, the tiny "grain of rice" size Ethernet module that CEO of a security audit company allegedly found, was not present in other SuperMicro servers. SuperMicro itself, as well as it's buggest customers did not confirm the findings.From what i recall, the story was very vague, there were no pictures of the specific chip, no pictures of the motherboard of the motherboard that would include serial, i.e. no details that would accompany a serious security research.
evanjrowley: It's sad to see what's happened to SuperMicro. They were one of the few vendors of server-grade hardware fitting standard ATX, mATX, and ITX form factors. In my experience their hardware was always better than the others who attempted to do the same (Gigabyte, Asus, ASRock). These days, motherboards with the features I want are going to be on AliExpress. Ironic considering this latest news is about putting trade barriers between the US and mainland China.
czbond: If you do, you could protect yourself with a sell stop below $17.25... because if it breaks that on weekly candles, next are $14 and $10.Not investment advice, do you own research.
Namahanna: The Gamers Nexus GPU Blackmarket deep dive was great at digging into this. https://www.youtube.com/watch?v=1H3xQaf7BFIAnd the entire Bloomberg takedown drama added fire to the flames.
fidotron: From thousands of miles away you can hear the fans at the NSA data center as they spin up checking the background to all responses to this posting.
simonw: I'd been assuming that the Chinese AI labs producing excellent LLMs despite the NVIDIA export restrictions was due to them finding new optimizations for training against the hardware they had access to.I wonder if any of those $2.5B of smuggled chips ended up being used for those training runs.
John23832: The answer is, of course lol?Gamers Nexus did a whole deep dive which basically proved that Chinese researchers had access to whatever they wanted.https://youtu.be/1H3xQaf7BFI?si=ojlxOC7uiPqZxv0N
simonw: Some of the big LLM labs have written about their training hardware.DeepSeek v3 was trained on 2,048 NVIDIA H800s. https://arxiv.org/abs/2412.19437MiniMax M1 used 512 H800s. https://arxiv.org/abs/2506.13585The H800 wasn't banned in the first round of export controls - but was after October 2023: https://www.cnbc.com/2023/10/17/us-bans-export-of-more-ai-ch...Z.ai say they used Huawei hardware: https://www.theregister.com/2026/01/15/zhipu_glm_image_huawe...Qwen and Kimi haven't disclosed their hardware as far as I can tell.
hangonhn: Yeah what as the story behind the BBerg take down drama? I just remember it being something absurd.
nebula8804: You either become an Apple or you eventually circle the drain competing to zero margins which forces 'other methods' of generating growth.
tcdent: I'm kindof surprised by this take.Did you think the hesitancy of westerners engaging and relying on Chinese labs was due to vibes? There are fundamental cultural differences at play, wether we are comfortable admitting that or not.
stevewodil: Thank you stock astrologist
peyton: Simon, love your work. Hope this is sarcasm. If not, imagine the opposite: Sam Altman and co suddenly started producing tons of content about how smart they are in Mandarin. Why do they even need a story to begin with, let alone one they push halfway around the world?The $2.5B number is just these guys. It could be 10x in total.
latchkey: I've had my own dealings with this awful company. Including Wally.Let's just say that none of this comes as any surprise.Now, what people should be asking is how much Jensen knew. In May he said there was nothing going on. But the videos of the Chinese guy holding H1/200's ... never got to him?Also interesting how they waited until just after GTC...
Namahanna: GN used Bloomberg clips of US Gov officials speaking on AI chip matters, fully under fair use.And Bloomberg did a DMCA takedown through youtube, copystrike in parlance which pulled the video down for a week. GN had no recourse other than to wait and counterclaim.Week timed out, Bloomberg did nothing but be the bully.Louis Rossmann's excellent explainer video here on the Bloomberg bit: https://www.youtube.com/watch?v=6RJvrTC6oTI
cobertos: How do you even find motherboards on AliExpress properly? Do you have a methodology to split the chaff from the wheat?
segmondy: what chaff? Just search, find what you want and buy. It's like ebay.
Aurornis: Being like eBay is why it's full of chaff. There's a lot of really bad hardware on Aliexpress.You either take a gamble on something and hope it's good, or try to buy the same thing that someone else bought and reviewed.
