Super Micro Computer (SMCI) Stock Plunges Amid Reports of PLA-Affiliated Universities Acquiring Banned Nvidia Chips

Key Highlights

• At least four Chinese educational institutions, including two with connections to the People’s Liberation Army, acquired Super Micro server systems containing banned Nvidia A100 processors within the last twelve months.
• Federal authorities recently indicted three individuals associated with Super Micro, including a company co-founder, for their alleged role in facilitating the illegal export of $2.5 billion in American AI technology to Chinese entities.
• The company maintains it was an unwitting victim of the smuggling operation and was not implicated in the legal proceedings.
• A pair of U.S. senators have formally requested that Commerce Secretary Howard Lutnick temporarily suspend all export authorizations for cutting-edge Nvidia AI processors destined for China and intermediary nations in Southeast Asia.
• Both Beihang University and Harbin Institute of Technology — institutions currently subject to U.S. export restrictions — have been identified as recipients of the prohibited hardware.

Shares of Super Micro Computer (SMCI) and Nvidia (NVDA) experienced significant declines on Thursday following a Reuters investigation revealing that Chinese academic institutions with military affiliations successfully obtained Super Micro server systems containing prohibited Nvidia AI processors.

Super Micro Computer, Inc., SMCI

According to procurement records examined by Reuters, four Chinese universities completed purchases of these systems during the previous year. Two of these institutions maintain documented relationships with the PLA.

Since 2022, American authorities have imposed restrictions on exporting specific Nvidia processors, particularly the A100 model, to Chinese buyers. These limitations stem from concerns that sophisticated AI hardware could enhance China’s military technological capabilities.

This development follows closely on the heels of last week’s criminal charges against three individuals with Super Micro connections — one being the company’s co-founder — who allegedly orchestrated the illegal transfer of a minimum of $2.5 billion in American AI equipment to China.

Notably, Super Micro itself was excluded from the federal indictment. Company representatives have maintained that the organization was exploited by an intricate smuggling operation executed by the accused individuals.

Reuters’ investigation additionally uncovered that two other universities — one possessing military connections — initiated similar procurement efforts, although confirmation of completed transactions remains unavailable.

Super Micro refused to provide commentary regarding the procurement documentation. Nvidia representatives stated the company maintains ongoing collaboration with its customers and federal authorities to ensure regulatory compliance.

Military-Affiliated Institutions Identified in Procurement Documentation

Beihang University in Beijing, recognized as one of China’s prestigious “Seven Sons of National Defense,” appears among the confirmed purchasers. Documentation dated March 16 reveals the institution acquired a machine-learning workstation constructed around a Super Micro platform incorporating four Nvidia A100 processors.

The Harbin Institute of Technology (HIT), another member of the “Seven Sons” group renowned for its research in missile technology, satellite systems, and robotics, obtained a Super Micro configuration featuring eight Nvidia A100 units, according to procurement notices published in July.

Both educational institutions currently appear on America’s export restriction list, creating substantial legal barriers for U.S. corporations attempting to supply them with controlled technology. Neither university provided responses to media inquiries.

Legislative Leaders Advocate for Export Suspension

Responding to these revelations, two members of the U.S. Senate submitted correspondence to Commerce Secretary Howard Lutnick on Monday. Their communication advocates for a temporary suspension of all export licenses permitting advanced Nvidia processors and server platforms to reach Chinese entities or intermediary operations throughout Southeast Asia.

The current administration had previously authorized sales of Nvidia’s H200 processors — which surpass currently restricted products in performance — to Chinese buyers, contingent upon specific operational requirements. According to sources speaking earlier this month, Nvidia has secured Beijing’s reciprocal authorization to market the H200 within China, although no confirmed transactions have materialized to date.

Representatives from China’s commerce ministry and the U.S. Commerce Department have not issued responses to Reuters’ requests for official statements.

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