Co-founder Wally Liaw and contractor Willy Sun pleaded not guilty to charges that they illegally exported Nvidia-powered servers to China by removing labels and serial numbers and replacing them with dummy units. Prosecutors allege these shipments generated billions of dollars in unauthorized sales over the past two years, and a third person linked to the operation remains at large.

Although Nvidia itself has not been charged, U.S. authorities are tightening export controls on AI chip shipments in response to these allegations. The increased scrutiny could disrupt Nvidia’s supply chain, limit sales into China and other markets, and impose higher compliance costs across its distribution network.