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TL;DR: Read the fucking indictment, I am convinced this is an overreaction. I think SMCI is bullish as fuck.
Source: https://storage.courtlistener.com/recap/gov.uscourts.nysd.660027/gov.uscourts.nysd.660027.2.0.pdf
To begin, I see a lot people say the indictment relating to employees for Super Micro is catastrophic for the company. I completely disagree.
The indictment is not against Super Micro Computer. It’s against individual actors tied to a reseller/intermediary. If prosecutors believed the company itself knowingly participated in the scheme, they could have charged it. They didn’t.
The document actually describes the company flagging and questioning the activity multiple times.
\>SMCI personnel raised concerns about the volume of sales and the ultimate destination of the servers.
\>Shipments were apparently halted at various points while compliance reviewed the transactions.
\>Shipments were paused while SMCI sought additional information regarding the end users of the servers.
The alleged conspirators’ response was not the company approving everything. Instead, according to the indictment, they worked around the compliance checks.
Furthermore, according to the indictment, prosecutors allege that thy even staged a fake inspection:
\>The defendants arranged for an audit in which dummy servers were presented as if they were the originally shipped units.”
People online keep saying “there’s no way the company didn’t know.” Bullshit.
The indictment reads more like a scenario where compliance raised concerns and was reassured by the customer. If the founder of a multibillion-dollar customer is telling employees the issue is resolved and pushing to continue shipments, that kind of authority carries weight. In most organizations people defer upward unless there is clear proof of wrongdoing. Why the fuck would they think a person of that authority be breaking numerous federal laws?
Anyways, this is why I think this whole thing is an overreaction, and if anything, made me bullish:
According to the indictment, the alleged intermediary became a massive customer very quickly:
\>Company-1 generated approximately $99.7 million in revenue in a single quarter and approximately $2.5 billion cumulatively.
At first, I was concerned because I was like oh fuck, SMCI just lost a huge customer and their balance sheet is going to be dog shit. Nope.
\>The servers contained advanced GPUs manufactured by NVIDIA that are subject to export restrictions because of their use in high-performance AI computing.
Assuming the allegations are true, the picture painted by the indictment is basically this: buyers allegedly created shell companies, moved billions of dollars of hardware through multiple jurisdictions, falsified records, and even staged audits just to keep obtaining AI servers built around GPUs from Nvidia.
This shit means that SMCI’s servers are INCREDIBLY IN FUCKING DEMAND. For fucks sake, people were allegedly willing to construct a complex international diversion network to access the hardware.
And that’s the part people seem to be missing. If the intermediary channel disappears because of enforcement, the need for AI compute doesn’t just evaporate. The demand still exists. It just has to find compliant channels.
The exposure of the alleged scheme like this likely leads to tighter compliance and auditing across the industry. That supply channels for the same hardware that everyone already knows is supply-constrained.
In conclusion, SMCI has high fucking demand. I’m bullish as fuck. Let’s fucking go.
Also I tried to get the fucking quote function to work, but it’s not.