Supermicro soared because of $4 trillion Nvidia—but Jensen Huang can walk away any time he wants

When Nvidia CEO Jensen Huang got onstage at an event in his native Taiwan in 2024 to talk about the future of AI and supercomputers with Supermicro CEO and co-founder Charles Liang, the familiarity between the two was obvious.

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“When we’re together, sometimes we speak Taiwanese, sometimes we speak Mandarin, and then when we disagree, we speak English,” Huang joked in English.

Huang was there to give a keynote address alongside Liang, and the two marveled at stacked server racks as they slipped out in and out of English to joke and compliment each other on their respective tech.

“Very beautiful,” said Huang, as he gazed at a server. “Charles said that everything in here is Nvidia, for all the American citizens.”

At the time, their companies—located in San Jose and Santa Clara about a 15-minute-drive from each other in Silicon Valley—seemed in sync, and the two appeared jovial as they riffed in front of a packed crowd. But a high-profile scandal involving Supermicro has thrown a wrench into the tight relationship between the two companies, threatening a decades-long partnership that has made billions for each organization and helped power the AI boom.

In March, Supermicro co-founder Yih-Shyan “Wally” Liaw was arrested by federal agents in California on charges that he allegedly smuggled $2.5 billion worth of Nvidia-powered servers to China in 2024 and 2025. Liaw has pleaded not guilty and is free on a $5 million bond. Supermicro, Liang, and the company’s third co-founder Sara Liu were not named as defendants, nor is Nvidia implicated. In a letter to investors, Liang said Supermicro was a victim in the smuggling scheme.

“I am deeply saddened and shocked that actions of these individuals were placed above our mission and our responsibility to national security,” Liang’s letter stated. He then wrote in bold: “It appears that Supermicro has been a victim of the elaborate schemes orchestrated by these individuals, which deceived both federal authorities and our internal compliance team.”

While Liang seeks to distance the company from the tainted elements, Supermicro’s longer-term fate may hinge on whether Nvidia stays close or decides to keep its distance. Nvidia is more than just a longtime partner to Supermicro, it’s an essential part of its business. Supermicro makes about 71% of its revenue from products mostly built around Nvidia’s GPUs—the powerful chips used for training and running AI models. But despite this reliance, Supermicro has no long-term supply contract with Nvidia.

Liaw’s arrest raises “serious credibility issues” for Supermicro, analysts at Bernstein recently wrote in a note to investors. If Nvidia opts to distance itself from Supermicro, the loss of GPUs could have a “devastating impact” on Supermicro’s businesses.

A note written by senior tech analyst Mehdi Hosseini from trading and investment firm Susquehanna called for the ouster of Liang and the entire Supermicro board. Liang has been CEO for nearly 32 years.

“In our view, this indictment only underscores the urgency of replacing the current Chairman/CEO with an external candidate and refreshing the entire board with fully independent directors,” Susquehanna’s note states.

A bond that goes back ‘almost since day one’

Nvidia and Supermicro were both founded in Silicon Valley in 1993, with each occupying different niches in the burgeoning tech industry. While Nvidia makes the specialized processors used, initially, for computer graphics and now for AI, Supermicro builds server racks and cooling systems that incorporate the chips. It’s one of many companies, including Dell and HPE, that build such systems and compete fiercely.

The partnership between Supermicro and Nvidia began “almost since day one” Liang said in an interview with Barron’s in 2023. But the ties between the two companies got more established after Supermicro went public in 2007. Nvidia was launching its first data center GPU and picked Supermicro as its first go-to-market partner, explained Kevin Connors, vice president of sales at Nvidia during an event in Taiwan in 2022. Connors said Nvidia worked with Supermicro to configure and test the systems against heavy workloads so Supermicro could sell the products to customers.

“Supermicro has a proven track record of time-to-market execution—no one moves faster than Supermicro, and Nvidia loves speed,” said Connors, speaking from a stage decorated with stacked cubes emblazoned separately with the companies’ logos.

Connors said the trend would continue with next-generation systems that would include Nvidia’s Grace and Hopper models.

“We’ve had a great journey together, but the journey’s just begun,” said Connors. And in the years since, Supermicro has become more dependent on Nvidia, which dominates the market for the GPU chips that are critical for AI.

Today, Supermicro counts on its access to Nvidia’s ultra-hot GPUs for the lion’s share of its billions in revenues. Between fiscal 2023 and fiscal