Super Micro Computer, Inc.

(NASDAQ Global Select)
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Very Bearish -75

US learnt to suspect Nvidia chips were smuggled to Alibaba via Thailand

AI-generated analysis

🚨 US prosecutors allege a scheme where Super Micro Computer Inc.'s co-founder worked with Bangkok-based OBON Corp. and brokers to smuggle AI servers containing advanced Nvidia chips to China, violating US trade rules.

📉 The March indictment detailed this alleged operation, causing Super Micro shares to plummet in their worst drop since Washington imposed chip restrictions on China in 2022.

💼 Reports identify Alibaba Group Holding Ltd. as one of multiple end customers receiving some of the $2.5 billion worth of servers allegedly diverted from OBON Corp.

🚫 The US Attorney's Office and Commerce Department declined to comment publicly, noting that indictments do not name companies like OBON or Alibaba nor accuse them of wrongdoing without formal charges.

📣 A spokesperson for Alibaba denied any business relationship with Super Micro, OBON, or the brokers mentioned, stating they never use or have used banned Nvidia chips at their data centers.

💻 OBON Corp. is a lesser-known firm responsible for creating Siam AI, Thailand's sovereign cloud champion, which won an official Nvidia Cloud Partner designation in 2024.

🤵 The CEO of OBON and Siam AI was Ratanaphon Wongnapachant, nephew of former Thai Prime Minister Thaksin Shinawatra, but he claims to have left OBON when launching Siam AI and now represents only the latter.

📉 While OBON is not listed on its office directory and contact numbers are disconnected, Siam AI maintains independent headquarters and insists it adheres to all US export control laws.

⚠️ The allegations could severely impact Thailand's national AI ambitions and may reignite calls in Washington for stricter export controls on semiconductor shipments to the region.

🔍 Nvidia faces scrutiny over its due diligence on high-volume hardware sales after similar investigations into official partners in Singapore and a parent company in China regarding banned chip procurement.

🏢 Despite Siam AI hosting Nvidia CEO Jensen Huang for events promoting Thailand's sovereign AI roadmap, both companies have distanced themselves from the smuggling allegations.

🚔 A person familiar with operations suggests OBON is one of several suppliers for Siam AI, which has also planned acquisitions of Nvidia chips via a Dubai partner for other facilities.

Bullish Signals
  • Siam AI, the sovereign cloud champion of Thailand, secured an official Nvidia Cloud Partner designation, becoming the first company in Thailand to receive this honor.
  • Nvidia CEO Jensen Huang personally attended a major event hosted by Siam AI to discuss sovereign AI, highlighting strategic interest and validation of their technology roadmap.
  • Despite recent legal allegations, Siam AI has released a strong statement confirming full adherence to all US export control laws and regulations regarding its data centers.
  • Siam AI's CEO Ratanaphon Wongnapachant reiterated that the company is not involved in any smuggling activities and maintains independent operations from its partner OBON.
  • The company continues to pursue expansion, including plans to jointly acquire Nvidia chips with a Dubai-based partner and has already announced at least two other computing facility agreements.
  • Siam AI actively imports GPUs for its own internal use, demonstrating a commitment to powering Thailand's growing artificial intelligence infrastructure with advanced hardware.
Risk Factors
  • US prosecutors filed an indictment alleging a scheme where Super Micro's co-founder allegedly collaborated with an unnamed Southeast Asian company, OBON Corp., and third-party brokers to smuggle approximately $2.5 billion worth of servers containing advanced Nvidia chips to China, violating US trade rules.
  • The March indictment sent Super Micro Computer Inc. shares into freefall, marking the most significant chip smuggling crackdown since Washington restricted Nvidia sales to China in 2022.
  • OBON Corp., a Bangkok-based company allegedly central to the smuggling ring, has faced severe reputational damage as US authorities investigate its role without publicly accusing end customers like Alibaba of wrongdoing.
  • The alleged diversion of billions in AI semiconductors to China could reignite calls in Washington for stricter export controls on semiconductor shipments to Thailand, a region where the US has already considered three separate export control drafts.
  • OBON Corp. is now difficult to contact or verify, with its listed phone number disconnected and company representatives denying entry during reporter visits, raising concerns about corporate governance and operational transparency.
  • The scandal questions the efficacy of Nvidia's own due diligence processes, especially as other official Nvidia partners in Singapore have also drawn government scrutiny for alleged trade violations.
  • Siam AI, the sovereign cloud champion created by OBON, faces an identity crisis with its leadership distancing themselves from the allegations while maintaining vague statements about their independence from OBON.
Full Analysis
US authorities have accused Super Micro Computer Inc. (SMCI) of helping smuggle billions of dollars worth of servers containing advanced Nvidia chips into China through a Southeast Asian intermediary, with Alibaba Group Holding Ltd. alleged to be one of the end customers for some of the $2.5 billion in servers sold via this scheme. The indictment, filed earlier this year and outlining a method involving SMCI co-founder Charles Liang working with an unnamed Bangkok-based company identified only as OBON Corp., caused a significant drop in Super Micro’s share price upon public disclosure. Prosecutors claim this operation diverted AI semiconductors in violation of US trade rules, representing one of the most significant chip smuggling crackdowns since Washington first restricted Nvidia sales to China in 2022. OBON Corp., a relatively obscure company outside tech circles, was linked in the allegations through its role in creating Siam AI, Thailand’s sovereign cloud initiative. Company-1 (OBON) was described as having sold $2.5 billion of servers that allegedly went to Alibaba and other Chinese entities. OBON is connected to Ratanaphon Wongnapachant, CEO of OBON and nephew of former Thai Prime Minister Thaksin Shinawatra, who also founded Siam AI. Despite the allegations, Alibaba has denied any involvement in the smuggling activities, stating it has no business relationship with Super Micro, OBON, or the brokers mentioned in the indictment. They further stated they do not currently use or have ever used banned Nvidia chips in their data centers. Siam AI has issued statements asserting full adherence to US export control laws and maintaining independent headquarters separate from OBON, though it does not elaborate on their previous overlapping operations under Ratanaphon. Ratanaphon, who left OBON when launching Siam AI, declined to comment on the smuggling allegations involving his former company but stated that Siam AI imports GPUs for its own use and maintains compliance with all applicable regulations. Bloomberg reported that attempts to reach OBON for comment were unsuccessful, as the contact number listed on their website was disconnected and office staff denied entry or provided contact details. The alleged role of OBON in the smuggling scheme could significantly impact Thailand’s developing AI sector by reigniting calls in Washington for tighter restrictions on semiconductor shipments to the region. The US has previously considered export controls targeting Thailand three times, including a draft rule specifically addressing smuggling concerns, but had not moved forward until now. Additionally, this incident raises questions about Nvidia’s due diligence processes regarding high-volume sales of its hardware, given that other partners in Singapore and China have also faced government scrutiny or admitted to procuring servers with banned chips in recent months.