Nvidia senior manager linked to Supermicro scheme smuggling AI servers to China

That bill will likely face industry pushback, CNBC suggested, since cloud providers would bear the cost of that new compliance regime, including implementing better know-your-customer protocols.

For the US, ending remote access may seem like an increasingly urgent priority, but the Supermicro scandal shows that evading controls can often be as easy as forging a document in an overburdened system where neither top executives nor customs officials managed to flag billions of dollars in fraudulent diversions.

However, the global crackdown on employees striking shady deals to export AI servers to China does come as Nvidia recently announced it’s increasing the prices of AI servers by 15 percent. So, at the very least, any employees motivated by the potential of gaining even higher profits from illicit sales will seemingly be on notice.

In her op-ed, Barden-Hair suggested that the US was blindsided by Chinese AI server smuggling because it failed to learn from its own history. In 1998, the Senate Committee on Governmental Affairs investigated “Chinagate,” a campaign finance scandal where China used Southeast Asian companies as a cover to try to influence election outcomes.

In that scheme, China learned that cultivating ties with business moguls—particularly those who had deep financial investments in China but were based just outside its sovereign territory—provided the “ideal cover,” Barden-Hair said. And similarly, the unnamed Southeast…