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Super Micro Shares Plunge 25% After Co-Founder Charged in $2.5B Smuggling Plot
- alephnerd 7mo agoOof. SuperMicro also had it's hardware supply chain compromised back in the 2010s [0][1][2][3] [0] - https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies https://www.bloomberg.com/news/features/2018-10-04/the-big-h... [1] - https://www.bloomberg.com/features/2021-supermicro/ https://www.bloomberg.com/features/2021-supermicro/ [2] - https://www.schneier.com/blog/archives/2021/02/chinese-supply-chain-attack-on-computer-systems.html https://www.schneier.com/blog/archives/2021/02/chinese-suppl... [3] - https://www.theinformation.com/articles/apple-severed-ties-with-server-supplier-after-security-concern https://www.theinformation.com/articles/apple-severed-ties-w...
- progbits 7mo agoThose claims were never confirmed, no? Some of it might be true or trueish but I'm not talking Bloomberg's anonymous sources word for it, and with so much supermicro gear out there you would think some other evidence would show up.
- alephnerd 7mo agoA supply chain attack similar to Supermicro's would be much more targeted and recalls with national security implications do get flagged via a separate chain.
- protimewaster 7mo agoIt depends on what you consider confirmed. It was kind of corroborated, at least. There was a CEO of a hardware security firm that came forward after the original article. He claimed that his firm had actually found a hardware implant on a board during a security audit. It wasn't exactly as Bloomberg described, though. His take was that it was very unlikely that it impacted exclusively Supermicro, though. It was covered various places, including The Register https://www.theregister.com/2018/10/09/bloomberg_super_micro_china_spy_chip_scandal/ https://www.theregister.com/2018/10/09/bloomberg_super_micro...
- kantselovich 7mo agoI don't think it was a confirmed story. That is, the tiny "grain of rice" size Ethernet module that CEO of a security audit company allegedly found, was not present in other SuperMicro servers. SuperMicro itself, as well as it's buggest customers did not confirm the findings. From what i recall, the story was very vague, there were no pictures of the specific chip, no pictures of the motherboard of the motherboard that would include serial, i.e. no details that would accompany a serious security research.
- monocasa 7mo agoDid they originally say it was a grain of rice Ethernet module? I thought it was supposed to be an incredibly tiny micro sitting on the bmc's boot flash to break inject vulnerabilities.
- kantselovich 7mo agoI recall, at the time Bloomberg and their source were taking about tiny chip on the bmc that was masking as a resistor. However they did not produce any concrete evidence, citing NDA between that security company and their client.
- BobbyTables2 7mo agoEven that makes little sense. A malicious modification to the flash content would leave no physical evidence…
- CamperBob2 7mo agoThe only photo I saw of the "hidden Ethernet module" was a ceramic RF filter or diplexer, basically a passive $2 part that does nothing on its own, and that would have stuck out like a sore thumb if actually installed in the area where it was depicted. Just a random surface-mount component that someone pulled off another board or found on the floor behind a workbench. Allegedly.
- throwa356262 7mo agoDidn't that turn out to be incorrect? Multiple security companies looked into this and found nothing malicious.
- alephnerd 7mo agoNope. Bloomberg doubled down on it and even Bruce Schneider accepted it despite initially being a skeptic.
- tumult 7mo agoNo evidence was ever presented and nobody ever found anything, as far as I can tell?
- protimewaster 7mo agoThere was a security auditing firm that came out a few days later claiming they'd found a chip, similar to the one Bloomberg described, during a security audit. It's still nothing concrete, though. Their CEO basically said that they'd found one and that they couldn't say much more about it due to an NDA.
- BobbyTables2 7mo agoReminds me of how movies portray someone pretending to be a secret agent… “Can’t give any more details - it’s hush hush !”
- protimewaster 7mo agoThere also was a CEO of a hardware security company that came out and said that his firm had found an implanted chip during an audit. IIRC, he was convinced that it was very unlikely to be limited to Supermicro hardware.
- alephnerd 7mo ago> he was convinced that it was very unlikely to be limited to Supermicro hardware Yep. This was why there was a significant movement around mandating Hardware BOMs in both US and EU procurement in the early 2020s. Also, the time period that the Bloomberg story took place was the late 2000s and early 2010s, when hardware supply chain security was much less mature.
- frenchtoast8 7mo agoBloomberg's claims sound like science fiction: https://www.servethehome.com/investigating-implausible-bloomberg-supermicro-stories/ https://www.servethehome.com/investigating-implausible-bloom... Bloomberg's tech coverage is not great from what I've seen. Last year they published a video which was intended to investigate GPUs being smuggled into China, but they couldn't get access to a data center so they basically said we don't know if it's true or not. Meanwhile an independent Youtuber with a fraction of the resources actually met and filmed the smugglers and the middlemen brokering the sales between them and the data centers. Bloomberg responded by filing a DMCA takedown of that video.
- timschmidt 7mo agoWhat Bloomberg proposed - sniffing the TTL signal between BMC and boot ROM and flipping a few bits in transit - is far from science fiction. It would be easy to implement in the smallest of microcontrollers using just a few lines of code: a ring buffer to store the last N bits observed, and a trigger for output upon observing the desired bits. 256 bytes of ROM/SRAM would probably be plenty. Appropriately tiny microcontrollers can also power themselves parasitically from the signal voltage as https://en.wikipedia.org/wiki/1-Wire https://en.wikipedia.org/wiki/1-Wire chips do. SMBus is clocked from 10khz to 1mhz, assuming that's what the ROM was hanging off of, which is comfortably within the nyquist limit on an 8 - 20mhz micro. Something similar has been done in many video game console mod chips. IIRC, some of the mod chips manage it on an encrypted bus (which Bloomberg's claims do not require). Here's one example of a mod chip for the PS1 which sniffs and modifies BIOS code in transit: https://github.com/kalymos/PsNee https://github.com/kalymos/PsNee "On PsNee, there are two separate mechanisms. One is the classic PS1 trick of watching the subchannel/Q data stream and injecting the SCEx symbols only when the drive is at the right place; the firmware literally tracks the read pattern with a hysteresis counter and then injects the authentication symbols on the fly. You can see the logic that watches the sector/subchannel pattern and then fires inject_SCEX(...) when the trigger condition is met. PsNee also includes an optional PSone PAL BIOS patch mode which tells the installer to connect to the BIOS chip’s A18 and D2 pins, then waits for a specific A18 activity pattern and briefly drives D2 low for a few microseconds before releasing it back to high-impedance. That is not replacing the BIOS; it is timing a very short intervention onto the ROM data bus during fetch."
- fidotron 7mo agoFrom thousands of miles away you can hear the fans at the NSA data center as they spin up checking the background to all responses to this posting.
- nebula8804 7mo agoI'd like to think that modern centers are water cooled so it'd be more quiet these days unless you are implying that this application of theirs is running on legacy hardware? :P
- jacquesm 7mo agoI have it on good authority they only use SuperMicro ;)
- vicchenai 7mo ago[dead]
- b112 7mo agoSeems like a good buy now. They're still making and selling hardware.
- pinkmuffinere 7mo agoYou could be right. But reading the comments here it seems it's had 2-3 scandals in the last 4 years, which makes me suspect that more could be brought to light.
- b112 7mo agoYou could be right. Excellent, thank you! (Shifts entire portfolio)
- bityard 7mo agoFor fun, I will sometimes buy trivial positions in solid companies whose stock price falls 8-10% or so due to some minor temporary bad press and then resell in a month or two when the news cycle forgets about them and price rebounds. I make a decent amount of play money this way. SMCI has a pattern of missteps over the years, I would not qualify them as a solid future bet. (And in case someone asks the question, no that is not a viable long-term strategy one's retirement savings because it's very much speculating and doesn't work AT ALL when the market is volatile or falling as a whole.)
- phatfish 7mo agoExternal factors can be a quick recovery. Internal factors are often a long road. Accounting and corruption failures sounds internal to me.
- dwa3592 7mo agohttps://substack.com/home/post/p-191531928 https://substack.com/home/post/p-191531928
- evanjrowley 7mo agoIt's sad to see what's happened to SuperMicro. They were one of the few vendors of server-grade hardware fitting standard ATX, mATX, and ITX form factors. In my experience their hardware was always better than the others who attempted to do the same (Gigabyte, Asus, ASRock). These days, motherboards with the features I want are going to be on AliExpress. Ironic considering this latest news is about putting trade barriers between the US and mainland China.
- cobertos 7mo agoHow do you even find motherboards on AliExpress properly? Do you have a methodology to split the chaff from the wheat?
- segmondy 7mo agowhat chaff? Just search, find what you want and buy. It's like ebay.
- Aurornis 7mo agoBeing like eBay is why it's full of chaff. There's a lot of really bad hardware on Aliexpress. You either take a gamble on something and hope it's good, or try to buy the same thing that someone else bought and reviewed.
- timschmidt 7mo agoI always figured that was the trade-off for paying 1/3 the price. Having to buy 3x as many to find a good one. :P
- dessimus 7mo ago"Another Slot A motherboard :(, maybe the 4th one I buy from AliExpress will finally be that X870 motherboard I want!"
- int32_64 7mo agoRemember when Singapore buyers were an abnormally high percentage of nvidia's revenue? You have to wonder if these companies are this brazen because they know the DoJ will have political pressure not to nuke the bubble which is more important than being China hawks.
- colechristensen 7mo agoSanctions evasions happen A LOT and enforcement has always been spotty.
- joe_mamba 7mo agoYep, same how the sales of German industrial CNC, machines, tools and lathes exploded in Russia's neighbouring former soviet republics after 2022 for some reason. Man, Kazakhstan must be an industrial powerhouse by now with all that German machinery. Can't wait for Kazakh EVs and semiconductors to hit the market.
- asdff 7mo agoIs that Singapore's position in the world today? Tiptoeing between sinosphere and anglospehre economic quarreling? I see so many job postings there in like Woodlands and other parts of Singapore these days I'm just curious what the big impetus has been in recent years.
- c_o_n_v_e_x 7mo agoHaving previously worked in a few DCs in SG, I was incredulous when I saw those sales figures.
- simonebrunozzi 7mo agoSo, good time to buy on the panic?
- czbond 7mo agoIf you do, you could protect yourself with a sell stop below $17.25... because if it breaks that on weekly candles, next are $14 and $10. Or you could buy some calls instead when the volatility calms down. If you do it now, the volcrush could happen even if you're correct. Not investment advice, do you own research. I'm just someone on the Internet.
- stevewodil 7mo agoThank you stock astrologist
- brcmthrowaway 7mo agoHow did you learn algotrading?
- AlexeyBelov 7mo ago/r/wallstreetbets
- daedrdev 7mo agoId like to sell you a bridge
- simonw 7mo agoI'd been assuming that the Chinese AI labs producing excellent LLMs despite the NVIDIA export restrictions was due to them finding new optimizations for training against the hardware they had access to. I wonder if any of those $2.5B of smuggled chips ended up being used for those training runs.
- John23832 7mo agoThe answer is, of course lol? Gamers Nexus did a whole deep dive which basically proved that Chinese researchers had access to whatever they wanted. https://youtu.be/1H3xQaf7BFI?si=ojlxOC7uiPqZxv0N https://youtu.be/1H3xQaf7BFI?si=ojlxOC7uiPqZxv0N edit: not sure if this was sarcasm
- simonw 7mo agoSome of the big LLM labs have written about their training hardware. DeepSeek v3 was trained on 2,048 NVIDIA H800s. https://arxiv.org/abs/2412.19437 https://arxiv.org/abs/2412.19437 MiniMax M1 used 512 H800s. https://arxiv.org/abs/2506.13585 https://arxiv.org/abs/2506.13585 The H800 wasn't banned in the first round of export controls - but was after October 2023: https://www.cnbc.com/2023/10/17/us-bans-export-of-more-ai-chips-including-nvidia-h800-to-china.html https://www.cnbc.com/2023/10/17/us-bans-export-of-more-ai-ch... Z.ai say they used Huawei hardware: https://www.theregister.com/2026/01/15/zhipu_glm_image_huawei_hardware/ https://www.theregister.com/2026/01/15/zhipu_glm_image_huawe... Qwen and Kimi haven't disclosed their hardware as far as I can tell.
- tyre 7mo agoIf they were using banned chips they wouldn't declare them in public papers. There have been multiple documented/alleged cases of chips being routed through Singaporean shell companies. For example: https://www.tomshardware.com/tech-industry/artificial-intelligence/singapore-company-alleged-to-have-helped-china-get-usd2-billion-worth-of-nvidia-ai-processors-report-claims-nvidia-denies-that-the-accused-has-any-china-ties-but-a-u-s-investigation-is-underway https://www.tomshardware.com/tech-industry/artificial-intell...
- Namahanna 7mo agoThe Gamers Nexus GPU Blackmarket deep dive was great at digging into this. https://www.youtube.com/watch?v=1H3xQaf7BFI https://www.youtube.com/watch?v=1H3xQaf7BFI And the entire Bloomberg takedown drama added fire to the flames.
- hangonhn 7mo agoYeah what as the story behind the BBerg take down drama? I just remember it being something absurd.
- ipsum2 7mo ago[flagged]
- noir_lord 7mo agoHe used a clip legally under fair use without permission, which you don't need if it is under fair use.
- matkoniecz 7mo agoWorth noting that it was entirely legal do so, due to fair use rules.
- anonymousiam 7mo agoThe problem with fair use is that the rules are subject to challenge and interpenetration. Defending an argument for fair use costs a lot of money, and involves significant risk. The content creators know this, and they'll leverage their money and legal teams to sue for copyright violation, ignoring fair use. Fair use is a valid defense, but the defense must be presented and adjudicated, and that takes time and money.
- maxglute 7mo agoThey need a new logo.
- deleted 7mo ago[deleted]
- phendrenad2 7mo agoMaybe it's time to re-visit that "spy chip" story from almost a decade ago. Edit: Officially-debunked, I should note
- CamperBob2 7mo agoYes, debunked or at least never backed up any actual evidence. (Allegedly) just some Bloomberg (alleged) bullshittery, (allegedly) posted to move the market.
- monocasa 7mo agoWell, also had other pen testers come forward saying that they had found implants on supermicro servers and had talked to federal authorities who had said it was a known relatively large issue they were trying to get a handle on while keeping it under wraps. And if it were posted to move the market, that would have been about the most cut and dry SEC violation possible, posted at a time when the federal government still enforced such things.
- CamperBob2 7mo agoWell, also had other pen testers come forward saying that they had found implants on supermicro servers and had talked to federal authorities who had said it was a known relatively large issue they were trying to get a handle on while keeping it under wraps. Jeez, if only they had said that all these unnamed pen testers had said they had found implants and had talked to all these unnamed federal authorities, I'd have approached the question with an entirely different set of Bayesian priors! Thanks for filling in the blanks on that. And if it were posted to move the market, that would have been about the most cut and dry SEC violation possible, posted at a time when the federal government still enforced such things. It's (allegedly) company policy: https://www.politico.com/blogs/media/2013/12/the-bloomberg-market-moving-bonus-179407 https://www.politico.com/blogs/media/2013/12/the-bloomberg-m...
- monocasa 7mo ago
- latchkey 7mo agoI've had my own dealings with this awful company. Including Wally. Let's just say that none of this comes as any surprise. Now, what people should be asking is how much Jensen knew. In May he said there was nothing going on. But the videos of the Chinese guy holding H1/200's ... never got to him? Also interesting how they waited until just after GTC...
- throwaw12 7mo ago(I don't understand hardware well) Can someone shed light on why China still couldn't copy the Nvidia GPUs in some form? I understand its complex and there many parts to it, but which is the most complex part making it difficult for China to copy it? Let's say they don't have access to 3nm process, what if they just use 12nm and create GPUs with much bigger size but comparable performance with CUDA compatibility? Or other option could be less tensor units, training will take longer, but they might be able to produce it cheaply
- monocasa 7mo agoThey can given enough time. But there's a distinct time/value of investment equation with the current AI boom. The jury is at best still out on what that equation is for the goals of capital (it's increasingly looking like there's no moat), but if you're a national government trying to encourage local bleeding edge expertise in new fields like this it's quite a bit more clear.
- rfoo 7mo agoMostly high end lithography. They can copy it. And no, the software moat is not there if someone choose the blatant copy route. They just can't build it in the scale they want yet. > what if they just use 12nm and create GPUs with much bigger size but comparable performance Physics do not work this way :/
- markhahn 7mo agowell, physics does work that way, depending on what you mean by performance. (in the sense that power is normally part of performance when we're talking about chips). you could certainly use a larger process and clone chips at an area and power penalty. but area is the main factor in yield, and talking about power is really talking about "what's the highest clockrate can you can still cool". so: a clone would work in physics, but it would be slow and hot and expensive (low yield). I think issues like propagation delay would be second- or third-order (the whole point of GPUs is to be latency-tolerant, after all).
- willx86 7mo ago
- markhahn 7mo agointeresting that the stock market (a subset of the prediction market now, right?) would even care, or would take this as a negative. "sorry guys, I did something token-bad a while ago that got you more money." that's the sort of meaculpa I'd expect to get rewarded these days...
- gzread 7mo agoIt's because they're now getting you less money because they had to stop doing the thing
- hereme888 7mo agoHaving a net worth of ~$474 million just isn't enough for some people, I guess.
- avidruntime 7mo agoMICE is the acronym for categorizing the common motivations for espionage: M - Money/Greed I - Ideology/Divided Loyalty C - Coercion/Compromise E - Ego Sometimes, I think we look at people who are this wealthy and think they should be immune to these kinds of shenanigans, but I'd wager that the -ICE becomes even easier to exploit in people once they no longer need money, if they were already susceptible to it to begin with.
- jacquesm 7mo agoI wonder which of these the intelligence services prefer. Every one of them has their own advantages and drawbacks in terms of predictability, reliability, long term stability and chances of double dipping/playing both sides.
- driftnet 7mo agoMost of these assets are not super spies. They have access to one particular type of information and the adversary squeezes all they can until all the juice is gone. Sophisticated espionage and double agents only exist in le Carre novels now.
- gzread 7mo agoYou have to be greed motivated to become wealthy at all. People don't get there by being satisfied with a few million, there's a selection effect.
- WarmWash 7mo agoUltra wealthy people are not in it for money. They like the game, and the money is a side effect. Many are willing to cheat evidently too.
- throwaway27448 7mo agoViolating sanctions isn't exactly the same thing as smuggling. It also doesn't seem like it should be a crime to disagree with your state on who deserves what service... i never voted for the dingbats who control who is called a terrorist, let alone the people scared of china.
- palmotea 7mo ago> It also doesn't seem like it should be a crime to disagree with your state on who deserves what service... Seems like that's a pretty obvious and straightforward power for a state to have. The state has to make foreign and domestic policy decisions, and to be effective that would have to include trade restrictions. Otherwise you could have situations like businessmen profiting by selling weapons to the enemy to kill his own countrymen--and there are sociopaths who'd do that. > i never voted for the dingbats who control who is called a terrorist, let alone the people scared of china. So what?
- throwaway27448 7mo ago> Otherwise you could have situations like businessmen profiting by selling weapons to the enemy to kill his own countrymen We do this already, though—we sell weapons to israel to kill americans living in palestine—Israel has certainly killed many more americans than Iran ever has. And yet, the sanctions are applied as if the situations were the opposite. Make it make sense! This entire line of thinking just seems like delusion to comfort yourself for having to live under a shitty state.
- kube-system 7mo ago> Violating sanctions isn't exactly the same thing as smuggling. The actions described in the article is both smuggling and a violation of sanctions.
- gosub100 7mo agoI agree. this is about US corporations using the government to protect their business moat. But 300M citizens can't use the government to ensure we have access to a doctor. It's sickening. China would be such a great competitor at what, making deep fakes or stealing from artists/musicians? It's stupid-on-top-of-stupid.
- Razengan 7mo agoFor a split second I read that as Super Mario shares
- chourobin 7mo agosame!
- deepsquirrelnet 7mo agoThis is even after the Hindenburg research report that found numerous screaming red flags a few years ago. https://hindenburgresearch.com/smci/ https://hindenburgresearch.com/smci/
- deleted 7mo ago[deleted]
- whacko_quacko 7mo agoNot a fan of trade barriers, but love it when CEOs go to jail for ignoring the law. Now start enforcing copyright laws against AI companies please <3 A (classically) liberal society can only work if everyone is held to the same standard of the law.
- deleted 7mo ago[deleted]
- vicchenai 7mo ago[dead]