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Nvidia's Taipei Office Raided As Taiwan's AI Chip-Smuggling Dragnet Results In Arrests

Zero Rss
2 months 1 week ago
Nvidia's Taipei Office Raided As Taiwan's AI Chip-Smuggling Dragnet Results In Arrests

Taiwanese prosecutors have detained an Nvidia employee and searched the chipmaker's Taipei office, the first time the island's criminal investigation into the diversion of restricted AI hardware to China has reached inside the company whose processors sit at the center of it.

The Keelung District Prosecutors Office said Tuesday it had detained a man surnamed Chang on suspicion of falsifying business documents under the Criminal Code, after investigators searched his home and his workplace on July 24. Prosecutors said Chang 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." A court granted the detention request.

The statement did not name Nvidia. Bloomberg first reported that Chang works for the company and that the search covered his desk at Nvidia's Taipei office, and Bloomberg's sources said the detention also involves an allegation of breach of trust. Prosecutors have not accused Nvidia of any wrongdoing.

Seven people are now being held in the case, including two from Super Micro Computer and one from Taiwan-listed Albatron Technology. Chang is the first known Nvidia employee to face detention in a chip diversion case anywhere.

The investigation opened in May, when Taiwanese officials said they were examining the shipment of high-end AI servers built by Super Micro and containing restricted Nvidia chips to China, Hong Kong and Macau in violation of US export controls. Those held are accused of forging documents to move roughly 50 Super Micro servers. Some cleared Taiwanese customs and were routed to China through Japan, an official previously told AFP.

Taiwanese media have described Chang as a senior business-development manager and reported that prosecutors are examining end-user and know-your-customer documentation he is alleged to have signed off on - the paperwork layer that export compliance depends on. Prosecutors have released no further detail on his role or the evidence.

Nvidia, whose chips power most of the world's advanced AI systems, said it sells primarily to established partners and original equipment manufacturers that help ensure compliance with US export rules. "Smuggling is a nonstarter," a spokesperson said. "Even relatively small exporters and shipments are subject to thorough review and scrutiny on both sides of the globe, and any diverted products would have no service, support, or updates."

The American Case

Taiwan's investigation runs alongside a far larger US enforcement action. In March, the Justice Department unsealed charges against Super Micro co-founder and board member Yih-Shyan "Wally" Liaw, Taiwan sales manager Ruei-Tsang "Steven" Chang and contractor Ting-Wei "Willy" Sun, alleging a conspiracy to divert roughly $2.5 billion in Super Micro servers carrying restricted Nvidia GPUs - including H200 and B200 parts - to China between 2024 and 2025 without Commerce Department licenses.

Liaw's trial is set for November 2. He faces up to 20 years on the lead conspiracy count. Chang has been described in earlier reporting as a fugitive. Super Micro was not charged, has said it is cooperating, and placed the implicated employees on leave. Taiwanese prosecutors have said it is too early to tell whether their case connects to the American one.

The Gap Prosecutors Are Working Around

Taiwan manufactures the world's most advanced semiconductors and assembles them into the servers at issue. It has no statute that directly criminalizes exporting AI chips to China.

That is why the charges in Keelung are forgery and false business records rather than anything touching the diversion itself. A proposed amendment to Taiwan's Foreign Trade Act, adding what has been described as a mainland China semiconductor clause, would let prosecutors charge the export directly. It has not passed. The Ministry of Economic Affairs has confirmed consultations with Washington on adopting performance-threshold controls modeled on the US framework, without committing to a timeline.

Seven weeks into the case, prosecutors are still building it out of the general Criminal Code.

Washington has restricted sales of Nvidia's most capable accelerators to China since 2022, on the argument that hardware that trains commercial models also trains military and surveillance ones. Blackwell-class parts remain under a presumption of denial, meaning license applications are effectively refused. The H200 was moved to case-by-case review in January.

Chinese demand has not moved with the policy. Older-generation parts command steep premiums on the gray market, and diversion reports have circulated for years. The servers in the Taiwan case are worth a fraction of the American one, which is roughly the point: the hardware is scarce enough that even small volumes are worth forging paperwork over.

Tyler Durden Tue, 07/28/2026 - 13:20
Tyler Durden

New details emerge in Kyle Shanahan crash — including who was at fault 

NY Post
2 months 1 week ago
The details of the car accident involving 49ers head coach Kyle Shanahan have been scant. But On SI’s Grant Cohn appears to have uncovered a new element of the crash. Shanahan was reportedly holding a cell phone during the accident, while the other driver was at fault for the collision. 49ers head coach Kyle Shanahan...
Valentina Martinez

FIRY Wins $719 Million Game Of Solitaire, Torching Shorts Along The Way

Zero Rss
2 months 1 week ago
FIRY Wins $719 Million Game Of Solitaire, Torching Shorts Along The Way

Markets rarely hand you a clean morality play. On Monday night, a federal judge entered one, clocking in no less than 78 pages, in the public docket. And for anyone who has played one of America's chart-topping “skill gaming” apps - a group that certainly includes many readers of this site - this may be for you.

A federal trial has now established that at Papaya Gaming, the private Tel Aviv-based publisher of Solitaire Cash and Bingo Cash, the “humans” across the table were actually quite often programmed bots.

The winner in all of this is Firy, Inc. (of the eponymous FIRY ticker), the operator that played the SPAC game to a $3.5 billion valuation in 2020, roundtripping 96% to a $130 million market cap with an estimated 20% of its float sold short.

Needless to say, at a market cap of a paltry $130 million, the market had written the whole thing off, pricing FIRY below the $185 million of cash on its latest, March 31st balance sheet, never mind the platform or anything else left on either side of the ledger.

But all that changes now. FIRY led the lawsuit against Papaya and is the beneficiary of a $719 million award handed down overnight, well over 5 times its market cap. This is the judge’s ruling after a $420 million jury award and Papaya’s failed attempts to get the case tossed out.

What Papaya did, in the court's own words (from Monday’s Opinion)

  • “In January 2021, for example, Papaya used bots in about 90% of its cash tournaments” (Op. at 8.)
  • From 2021 to 2024, “bots accounted for over 13 million of the participants on Papaya's platform, compared to about 11 million human players.” (Op. at 7.)
  • "Papaya only paid customers roughly $2 billion of the $6.7 billion that it advertised had been awarded in prizes.” (Op. at 8.)
  • "When a bot ‘won’ one of these tournaments, Papaya kept all entry fees.” (Op. at 28.)

Liquidity bots, tailored bots, and losing before you played Papaya ran two kinds of fakes.

  • "Liquidity bots were used to create immediately accessible tournaments of various sizes, including up to 20 or more ‘players’.” “[A] 20-player tournament might have one human player and nineteen bots.” (Op. at 7.) Their job was to make a game exist instantly, at any hour of the night.
  • The second kind decided outcomes: “bots were used to give a player a designated win or loss. For instance, a player who had a losing streak could be given a ‘win’ to motivate them to keep playing in more tournaments.” (Id.) These “tailored bots” operated “in over 630 million Papaya tournaments, or in roughly one-quarter of the 2.6 billion tournaments that Papaya hosted during the years 2021 to 2024,” and “[m]ore than 6.1 million of those human beings played in at least one tournament where tailored bots were designed to give them a loss.” (Id.)

Think about that: millions of Americans paid to lose games that were over before they started.

The Fifth Amendment and the apology

Perhaps predictably, Papaya's executives pled the Fifth Amendment during the case and the court did not let them un-
ring that bell at the last minute.

  • “Papaya's executives invoked their Fifth Amendment right against self-incrimination at their depositions. About a year later, on the eve of trial, those same executives sought to withdraw their invocation of the Fifth Amendment privilege.” (Op. at 13.)

Later on, Papaya's own trial lawyers conceded to the jury: “Papaya has taken responsibility for its actions. It stopped
giving those customer complaint responses. It stopped using bots.” (Op. at 11 n.2.) Please clap. 

The $719 Million Blow

On April 23, a unanimous jury found Papaya liable for false advertising and awarded $420 million in damages - what the winning law firm King & Spalding calls the largest false-advertising award in U.S. history.

Yesterday's opinion granted a $719 million disgorgement of Papaya's profits - higher than the $420 million jury verdict - and did not mince words: “Papaya's fraudulent conduct was extraordinary.” (Op. at 37.) Papaya “entered the U.S. market through a massive deception” (Op. at 71) — a “willful, bad faith violation of the law.” (Op. at 76.)

FIRY ends up the big loser and the big winner

FIRY launched the first real-money skill-gaming platform back in 2012 (Op. at 4) and rode the SPAC wave public at a $3.5 billion valuation in December 2020. The court traced what happened next: “Skillz’s revenue had fallen by 60% in just two years, tumbling from $384 million in 2021 to $152 million, while Papaya's revenue skyrocketed from $163 million to $461 million over the same period.” (Op. at 10.) In June the company rebranded itself FIRY... because five years of a tortured stock price will do that to you.

Now What?

The cheater owes $719 million and the honest player collects. Good over evil, with interest.

The 20% of the float that was short into Monday's opinion bet on the wrong hand. On the April jury verdict alone, FIRY closed up 238% amid multiple volatility halts. And that was before the judge denied a new trial and raised the number above what the jury awarded ($420 million to $719 million).

To appeal, Papaya must produce an appeal bond on the order of $800 million in real money — no bots accepted. Will the private credit bubble extend to writing that paper for a private Israeli company whose only product a federal jury and a federal judge have both found was fraudulently marketed? Is there an AI angle here? Asking for a friend in Tel Aviv.

Next Up: Voodoo

Monday was not the first time this has happened. In 2024, FIRY took AviaGames - publisher of Pocket7Games - to a California jury and won $42.9 million for patent infringement, two years before its latest win against Papaya (“Skillz Wins $42.9M IP Trial Against Rival Accused Of Bot Fraud”).

Now in 2026, FIRY takes a win against Papaya.

Then there is the one more case not yet discussed: FIRY’s July 2024 lawsuit against Voodoo, the French owner of Blitz Win Cash, over what it alleges is the same bot playbook. While Voodoo fights these claims and nothing has been decided, one would imagine the Papaya verdict is being analyzed today in Paris.

Tyler Durden Tue, 07/28/2026 - 12:40
Tyler Durden

Justin Herbert, Madison Beer get engaged after whirlwind romance

NY Post
2 months 1 week ago
Justin Herbert has found his forever partner. The Los Angeles Chargers starting quarterback got engaged to pop star Madison Beer, she announced on social media on Tuesday. Justin Herbert, Madison Beer engaged after whirlwind romance. The power couple first sparked dating rumors back in August 2025 when they were seen together at a video shoot....
Ryan Kostecka, Valentina Martinez

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