Supermicro, Nvidia Reportedly Face DOJ Scrutiny In Separate Inquiries — SMCI Stock Plunges

• Two DOJ inquiries involving Supermicro and Megaspeed focus on Alice Huang, Semafor reported.
• A separate DOJ antitrust investigation focuses specifically on Nvidia, but Jensen Huang is not a target of U.S. law enforcement investigations, Bloomberg said.
• The report about the investigations comes amid Jensen Huang’s resignation as CEO on Thursday following reports of two extramarital affairs.

Super Micro Computer (SMCI) shares fell more than 12% on Thursday after a reported U.S. Department of Justice (DOJ) inquiry into the AI server maker focused on Alice Huang, a woman U.S. officials suspect has ties to Chinese intelligence.

A Semafor report, citing two administration officials, said multiple DOJ probes could involve Nvidia (NVDA).  One investigation focuses specifically on Nvidia over antitrust concerns, while two other inquiries involve Supermicro and Megaspeed International. 

Read Next

SpaceX Commits $74B To New AI Campuses While Musk Eyes Hiring Former Nvidia CEO, Starship Readies Flight 15

Anan Ashraf

The publication said there was no indication the DOJ would seek criminal charges against Nvidia or Jensen Huang at this time.

The report about the investigations comes amid Jensen Huang’s resignation as CEO on Thursday following reports of two extramarital affairs, including one involving Alice Huang, whom U.S. authorities reportedly suspect of ties to Chinese intelligence. Nvidia appointed Chief Financial Officer Colette Kress as interim CEO and began searching for a permanent successor.

Scrutiny Of Possible Chip Smuggling

Separately, Bloomberg also reported that the DOJ is investigating whether entities linked to Alice Huang were involved in efforts to smuggle Supermicro products into China.

The inquiry is being led by the U.S. Attorney's Office in Manhattan, the report said, citing a person familiar with the matter. It remains unclear whether the investigation is connected to existing chip-smuggling cases in the U.S. or Asia, or what role Huang or entities linked to her may have played.

The DOJ is investigating Huang's former company, Megaspeed, over suspected semiconductor smuggling. The company has denied wrongdoing. The publication said prosecutors are separately conducting an espionage investigation examining Alice Huang's relationship with Jensen Huang. 

The former Nvidia CEO is not a target of U.S. law enforcement investigations, per the Bloomberg report.

Stocktwits reached out to Nvidia and Supermicro for comment but has not received a response til the time of this publication.

Supermicro's Previous Export-Control Case

In March, federal prosecutors charged Supermicro co-founder Yih Shyan "Wally" Liaw and two others over an alleged conspiracy to divert Nvidia-powered servers to Chinese customers through a Southeast Asian company.

Liaw pleaded not guilty and is no longer with Supermicro, which was not named as a defendant in the case. In August, the company said an independent investigation found no evidence that current senior management knew of the alleged diversion scheme.

According to the publication, Alice Huang is currently living in Beijing with the knowledge of security officials. She was connected to Huang through Megaspeed, Nvidia’s largest chip buyer in Southeast Asia. 

Her potential involvement, or that of entities linked to her, in the alleged smuggling of Supermicro products into China remains unclear, and DOJ investigations can conclude without charges, Bloomberg said.

What Retail Thinks of SMCI Stock

Retail Investors’ sentiment around SMCI stock remained ‘bullish’ on Stocktwits, with the stock being one of the top-trending tickers on the platform.

So far this year, SMCI stock has fallen over 14%. In comparison, the Vanguard Morningstar Mid-Cap Growth ETF (VOT), which holds the stock, has risen over 4% over the same period.

See Also: Fed’s Barr Urges Preparation For Possible ‘Serious Short-Term Disruptions’ In Labor Market From AI

For updates and corrections, email newsroom[at]stocktwits[dot]com.