Super Micro Computer denied any business relationship with Megaspeed on November 13, pushing back against federal inquiries into AI server smuggling.
Super Micro Denies Megaspeed Ties
Super Micro stock fell in trading. The drop began after reports surfaced of a Department of Justice probe into entities linked to Alice Huang. Prosecutors in Manhattan are investigating whether those entities funneled Super Micro servers into China, according to Bloomberg reports cited by Yahoo Finance. The hardware maker issued a direct denial regarding the Singapore company at the center of the controversy.
“Megaspeed is not, and has never been, a Supermicro customer,” a spokesperson told Fortune in a statement.
The firm said that it has remained responsive to questions. It fully cooperated with U.S. and Taiwanese officials. It voluntarily supplied data and addressed all inquiries from Singapore regulators thus far.
Charles Liang is one of Supermicro’s three co-founders. He is a longtime friend of Jensen, and both originate from Taiwan. They shared the stage at multiple massive Computex tech events in Taiwan, including in 2024 when Jensen was photographed having drinks with Alice. The Attorney’s Office in Manhattan is leading the inquiry, and DOJ investigations can conclude without charges.
Export Controls and Regulatory Hurdles
The federal probe compounds regulatory hurdles for Super Micro. The firm revealed a grand jury subpoena alongside investigations from the SEC, the Commerce Department’s Bureau of Industry and Security, and international authorities. Export controls were already a sore spot for Super Micro.
Super Micro cofounder Yih-Shyan “Wally” Liaw was arrested and charged along with others for allegedly working to route servers into China through a front company, as reported by Fortune. The accused parties consist of a former Nvidia Taiwan employee and two former Supermicro Taiwan staff members, who are confronting document forgery and breach of trust accusations.
Super Micro produces application-optimized storage, switch systems, and servers by employing a modular building-block design that enables clients to assemble configurations using reusable parts. Production is handled internally across sites in the Netherlands. Production is also handled in the U.S. and Taiwan, with the company pointing to investments in worldwide compliance infrastructure, whereas Dell operates on a much larger scale.
Financial Results and Market Impact
The legal headlines accompanied a selloff in AI hardware. Dell Technologies stock sank 8%. Super Micro stock slipped as quick read reports noted Super Micro and Dell bleed in the market. Super Micro recently delivered a fiscal first-quarter report.
It posted revenue of $19.95 billion that nearly quadrupled year-over-year and beat Wall Street’s $16.29 billion forecast as detailed on Longbridge. Earnings per share came in at $1.81, above the $1.28 estimate. Gross margin rose to 12.8% from 9.5% a year earlier, beating Wall Street’s estimate of 11% and showing better profits on sales.
Super Micro gave an outlook for the current quarter. Management projects revenue between $19.5 billion and $21.5 billion, surpassing the analyst consensus of $17.51 billion. Its EPS forecast of $1.66 to $1.90 topped Wall Street’s $1.14 estimate.
For the full fiscal year, the company expects revenue of $72 billion to $82 billion, with the forecast pointing to continued demand for Super Micro’s AI servers as data center spending remains active. Super Micro Computer shares bounced back by 1.73% during Thursday’s extended trading session, clawing back a portion of the 11% drop suffered earlier in the regular session.