Super Micro Shares Plunge 25% After Co-Founder Charged in $2.5B Smuggling Plot

(I don't understand hardware well)

Can someone shed light on why China still couldn't copy the Nvidia GPUs in some form?

I understand its complex and there many parts to it, but which is the most complex part making it difficult for China to copy it?

Let's say they don't have access to 3nm process, what if they just use 12nm and create GPUs with much bigger size but comparable performance with CUDA compatibility? Or other option could be less tensor units, training will take longer, but they might be able to produce it cheaply

The Gamers Nexus GPU Blackmarket deep dive was great at digging into this. https://www.youtube.com/watch?v=1H3xQaf7BFI

And the entire Bloomberg takedown drama added fire to the flames.

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.

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.

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.

The timing is brutal - SMCI already had the accounting restatement scandal in 2024, spent months fighting delisting, finally got somewhat rehabilitated in the AI infrastructure boom... and now this. 25% single-day drop on a company that was already trading at a discount to peers tells you the market was still pricing in tail risk. For anyone tracking institutional holdings - the 13F filings from Q4 showed several funds adding back SMCI after the accounting mess cleared up. Those bets just got very painful.

Maybe it's time to re-visit that "spy chip" story from almost a decade ago.

Edit: Officially-debunked, I should note

So, good time to buy on the panic?

https://substack.com/home/post/p-191531928

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...

They need a new logo.

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...