Taiwan authorities detained an Nvidia employee in a probe into alleged AI chip smuggling to China, marking significant enforcement of US-China export controls.

Prosecutors in Taiwan have detained an Nvidia employee as part of an investigation into the smuggling of the US tech giant's artificial intelligence chips to China. The man was detained after investigators raided his home and workplace on July 24, according to the Keelung District Prosecutors Office. He is suspected of offences including the falsification of business documents under Taiwan's Criminal Code.

Taiwanese officials launched the probe following discovery of shipments of high-end AI servers manufactured by Nasdaq-listed Super Micro Computer—equipped with advanced Nvidia chips—sent to China, Macau, and Hong Kong in violation of US export controls. "This Nvidia employee was identified as a person involved in the case after investigators analysed the relevant evidence following the previous round of searches targeting Super Micro," according to a source familiar with the investigation.

Prosecutors stated that the detained person is "strongly suspected of having committed the offences, and that there is a risk of flight, destruction of evidence, and collusion with accomplices or witnesses."

Seven people are now being held as part of the probe: the Nvidia employee, two employees from Super Micro, and one from Taiwan-listed Albatron Technology. They are accused of forging documents to ship approximately 50 servers made by Super Micro to China. Some of the servers were cleared by Taiwan customs before being sent to China via Japan.

Taiwan's prosecutors have not yet determined whether the case is connected to an Nvidia chip smuggling investigation in the United States and Singapore involving Super Micro Computer employees. Singapore police seized a luxury bungalow valued at over US$40 million this month as part of fraud investigations linked to the alleged transfer of AI chips. A US federal indictment unsealed in March revealed that employees of Super Micro Computer allegedly raked in billions of dollars by diverting Nvidia AI chips to China in breach of export controls.