Investing.com -- Super Micro Computer Inc. co-founder Yih-Shyan "Wally" Liaw pleaded not guilty Wednesday to charges of illegally diverting billions of dollars in Nvidia Corp.-powered servers to China during a hearing in Manhattan.

Federal prosecutors charged Liaw in a scheme to send US-assembled servers containing Nvidia's chips to Chinese customers in violation of US export controls. The case marks the highest-profile crackdown on alleged smuggling of restricted AI technology to China.

Prosecutors claim Liaw and two others associated with Super Micro sold the hardware to an unidentified Southeast Asian pass-through company and coordinated its shipment to customers in China. Also charged were Ruei-Tsang "Steven" Chang, a general manager in Super Micro's Taiwan office, and Ting-Wei "Willy" Sun, an outside contractor described by authorities as a "fixer" who allegedly aided in the diversion.

Sun also pleaded not guilty in the hearing before US District Judge Edgardo Ramos. Sun's lawyer said he is working with prosecutors on a bail package for his client. Liaw is free on $5 million bond. Chang is not in custody.

Ramos set a November 2 trial in the case.

The smuggling charges sent Super Micro shares plummeting when they were made public on March 19. Liaw has resigned from the board.