[HN Gopher] Super Micro Shares Plunge 25% After Co-Founder Charg...
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Super Micro Shares Plunge 25% After Co-Founder Charged in $2.5B
Smuggling Plot
Author : pera
Score : 297 points
Date : 2026-03-20 14:48 UTC (8 hours ago)
(HTM) web link (www.forbes.com)
(TXT) w3m dump (www.forbes.com)
| alephnerd wrote:
| Oof. 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-h...
|
| [1] - https://www.bloomberg.com/features/2021-supermicro/
|
| [2] - https://www.schneier.com/blog/archives/2021/02/chinese-
| suppl...
|
| [3] - https://www.theinformation.com/articles/apple-severed-
| ties-w...
| progbits wrote:
| Those 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 wrote:
| A 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 wrote:
| It 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...
| kantselovich wrote:
| I 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 wrote:
| Did 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 wrote:
| I 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.
| throwa356262 wrote:
| Didn't that turn out to be incorrect?
|
| Multiple security companies looked into this and found nothing
| malicious.
| alephnerd wrote:
| Nope. Bloomberg doubled down on it and even Bruce Schneider
| accepted it despite initially being a skeptic.
| tumult wrote:
| No evidence was ever presented and nobody ever found
| anything, as far as I can tell?
| protimewaster wrote:
| There 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.
| protimewaster wrote:
| There 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 wrote:
| > 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.
| unsnap_biceps wrote:
| I don't believe that there was ever extra chips being added
| to the boards, but what I could believe is that they
| shipped with firmware on specific chips that enabled data
| exfiltration for specific customers and due to a game of
| telephone with non technical people it turned into "they're
| adding chips inside the pcb layers!"
| monocasa wrote:
| I thought the point was an extra chip in the place of a
| pull up resistor or something that would edit the
| firmware image as it made its way across the bus, so you
| wouldn't see the modifications even if you pulled the
| flash chip and read it out manually, and would also be
| persistent across flash updates.
| greedo wrote:
| Schneier was simply taking at face value the contents of
| the Bloomberg article, especially the statement by Mike
| Quinn who claimed he was told by the Air Force not to
| include any Supermicro gear in a bid.
| WillPostForFood wrote:
| What was the last thing Schneier wrote on it? I thought it
| was this:
|
| _I don't think it's real. Yes, it's plausible. But first
| of all, if someone actually surreptitiously put malicious
| chips onto motherboards en masse, we would have seen a
| photo of the alleged chip already. And second, there are
| easier, more effective, and less obvious ways of adding
| backdoors to networking equipment._
|
| https://www.schneier.com/blog/archives/2018/11/that_bloombe
| r...
| alephnerd wrote:
| https://www.schneier.com/blog/archives/2021/02/chinese-
| suppl...
|
| HNers are acting reflexively skeptical (which isn't
| always a bad thing), but targeted supply chain based
| attacks conducted by a nation statein the manner
| described are actually doable, and back when I was still
| a line-level SWE this was when we started putting
| significant engineering effort into hardware tampering
| protections back in the 2015-17 period.
|
| The hardware supply chain incident itself most likely
| happened in the late 2000s to early 2010s when hardware
| supply chain security wasn't top of mind as an attack
| surface.
|
| Modchips targeting contemporaneous gaming systems like
| the PS1 and PS2 use a similar approach to the SuperMicro
| incident.
| frenchtoast8 wrote:
| Bloomberg's claims sound like science fiction:
| 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 wrote:
| What 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
| 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
|
| "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 wrote:
| From 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 wrote:
| I'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 wrote:
| I have it on good authority they only use SuperMicro ;)
| vicchenai wrote:
| The timing is brutal - SMCI already had the accounting
| restatement scandal in 2024, spent months fighting delisting,
| finally got somewhat rehabilitated in the AI infrastructure
| boom... and now this. 25% single-day drop on a company that was
| already trading at a discount to peers tells you the market was
| still pricing in tail risk. For anyone tracking institutional
| holdings - the 13F filings from Q4 showed several funds adding
| back SMCI after the accounting mess cleared up. Those bets just
| got very painful.
| b112 wrote:
| Seems like a good buy now. They're still making and selling
| hardware.
| pinkmuffinere wrote:
| You 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.
| bityard wrote:
| For 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.)
| dwa3592 wrote:
| https://substack.com/home/post/p-191531928
| evanjrowley wrote:
| It'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 wrote:
| How do you even find motherboards on AliExpress properly? Do
| you have a methodology to split the chaff from the wheat?
| segmondy wrote:
| what chaff? Just search, find what you want and buy. It's
| like ebay.
| Aurornis wrote:
| Being 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 wrote:
| I 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 wrote:
| "Another Slot A motherboard :(, maybe the 4th one I buy
| from AliExpress will finally be that X870 motherboard I
| want!"
| timschmidt wrote:
| I've never received something other than what I've
| ordered. At worst the documentation is scant or missing
| entirely. Specifically with respect to motherboards, most
| of the aliexpress specials I've interacted with have had
| completely unlocked BIOSes. Which are easy to get
| yourself into trouble with, but kind of nice to have when
| you need them.
| kube-system wrote:
| I think most of them just don't customize their bios and
| use the default fully-wide-open implementations from the
| upstream bios vendor.
| killingtime74 wrote:
| Have you heard of paying with PayPal/credit card?
| nebula8804 wrote:
| You either become an Apple or you eventually circle the drain
| competing to zero margins which forces 'other methods' of
| generating growth.
| deepsun wrote:
| And ideal effective market must have a zero margins. That's
| normal, what the economy strives for, what customers want.
|
| If some market has large margins, it means it has some
| inefficiencies.
| lazide wrote:
| It is impossible to have (actual) zero margins.
| 6510 wrote:
| It isn't, you can do things as a side project.
|
| I thought about quite often while visiting a pub owned by
| the land lord renting out 150 rooms above. Each floor had
| a large industrial shared kitchen, shared bathrooms,
| toilets and a large shared living room. If people had 1-2
| guests they would stay in their room, if they had 2-10
| guests they would use the shared space, if they had 4-80
| guests they would take the elevator to the pub. When one
| was bored with the guests or didn't have time they were
| left in the pub. Technically people had bar shifts in
| their rent contract (that you could buy your way out of)
| but there were plenty who enjoyed running the bar for
| free. Drinks were at cost. If you tried to tip or didn't
| take your change they left it on the counter and it would
| sit there for a day or two. The problem of the pinball
| machine earnings they solved with rounds of free drinks
| and chips.
|
| When asked the owner said exploiting a bar was entirely
| to much work. If he wanted more money from the people
| living there he could just increase the rent?
| lazide wrote:
| Those are negative margins.
| phil21 wrote:
| Yeah this is just describing providing amenity for common
| areas in a shared building. Not much different from the
| doorman and free water bottles in the lobby or the
| rooftop swimming pool being baked into the rent of the
| units.
| rubyn00bie wrote:
| It depends on what you mean, do you mean both gross and
| net? Just one of the two?
|
| Gross margin of zero would be mean you sell at exactly
| the cost to produce. Net margin of zero means you cover
| all your expenses including COGS. The only really
| difficult, practically impossible, thing would be doing
| both at the same time. Though, I could also see a case
| where you drive down net margins once sunk costs are paid
| and achieve both.
|
| Doing so practically, or sustainably, in most
| circumstances would be uhh crazy... but it's not
| impossible. Even then I think aiming for zero margin is a
| pretty credible tactic in eliminating competition if you
| can out sustain them.
|
| TLDR; Weird? Sure. But not impossible. And even sort of
| likely if you're trying to atrophy your competition out
| of existence.
| SoftTalker wrote:
| Ideally yes, in practice it needs to return more than just
| parking your money in a savings account.
| colechristensen wrote:
| Ehhh, I think it's more like the CEO and others were Chinese
| assets for a long time.
|
| Remember the 2018 accusations of spy chips implanted in
| supermicro motherboards that everyone denied so strongly?
| platinumrad wrote:
| This news doesn't magically make those 2018 accusations true.
| overfeed wrote:
| > Remember the 2018 accusations of spy chips implanted in
| supermicro motherboards that everyone denied so strongly
|
| It'd be easy to prove the existence of a pervasive "spy-chip"
| problem using a camera or a microscope. Unsurprisingly,
| neither Bloomberg nor it's quoted "experts" ever managed to
| do so, deapite loudly banging that drum.
| skullone wrote:
| Supermicro is definitely a "you get what you pay for". We
| bought thousands of servers from their vertical integrations
| partners, had massive board and backplane problems. Took a few
| years but they eventually took back over $30 million dollars
| worth of servers, which were scrapped ultimately because the
| rework on them was so cost prohibitive. We lost $30M on that
| even after the $30M in good will refunds. Supermicro also has
| the lowest bios/efi/bmc/ipmi/redfish out of any vendor we have
| seen. Just low tier cheap ass shit by a company who can barely
| survive quarter to quarter without running some new scam on
| customers, investors, and even governments.
| SoftTalker wrote:
| Pretty much the same experience (on a much smaller scale).
| And just open up one of their servers and compare the
| engineering to a Dell or HPE server. Anything that can be
| cheaped out is. Corrugated plastic for cooling air channels,
| FRU assemblies held in place with sheet metal screws, all
| very bargin basement.
| kube-system wrote:
| They look cheap even from the outside. They all look like
| they last went through a chassis redesign in 2002.
| EvanAnderson wrote:
| I haven't worked with anything at that scale, but the little
| bit that I was SuperMicro adjacent I was always unimpressed
| by the "fit and finish" of the entire experience, as compared
| to Dell and HP. (Having said that, the entire x86 commodity
| server experience is shitty anyway. I had a brief time, early
| in my career, when I did work with DEC Alpha machines. Man,
| they had their shit together. Stuff was expensive as sin, but
| stuff worked together and worked well. Build quality was
| tank-like.)
| jacquesm wrote:
| When Compaq servers were still a thing it was the same with
| those. You could drop them two stories and they'd probably
| continue playing if the cable was long enough ;)
|
| Oh and you'd get fined for damage to the pavement.
| phil21 wrote:
| Pretty much. But at one point you could buy 2 to 3 units to
| every equivalent Dell or HP unit unless you had enough scale
| to get volume discounts. At $30M I expect the price to be a
| lot closer though.
|
| Then it's a matter of how well your engineering/ops org is
| setup to deal with silly hardware issues and annoyances. Some
| orgs will burn dozens of hours on a random failure, some will
| burn an hour or treat the entire server as disposable due to
| aforementioned cost differences. If you are not built to run
| on cheaply engineered gear that has lots of "quality of life"
| sharp edges (including actual physical sharp edges!) then you
| are gonna have a bad time. Silly things like rack rails
| sucking will bite you and run up the costs far more than
| anyone would expect unless you have experience to predict and
| plan for such things beforehand.
|
| Of course you do have the risk of a totally shit batch or
| model of server where all that goes out the window. I got
| particularly burned by some of their high density blade
| servers, where it was a similar story to yours. Total loss in
| the 7 figures on that one!
|
| Totally agreed on their BMC/firmware department. Flashbacks
| to hours of calls with them trying to explain the basics. My
| favorite story from that group is arguing with them over what
| a UUID is - they thought it was just a randomly generated
| string. Worked until one didn't pass parsing on some obscure
| deeply buried library and caused mysterious automation
| failures due to being keyed against chassis UUID... and
| that's when they'd actually burn one into firmware in the
| first place.
|
| It was also always a tradeoff of having to deal with cheaped
| out hardware engineering with supermicro or with some
| horrible enterprise quarterly numbers driven sales process
| with Dell.
| SomeHacker44 wrote:
| Curious what the features are that you like and can source from
| AliExpress? I have usually gotten boards from Asus and its ilk,
| these days with 4+ M.2 slots...
| int32_64 wrote:
| Remember 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 wrote:
| Sanctions evasions happen A LOT and enforcement has always been
| spotty.
| joe_mamba wrote:
| Yep, 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.
| simonebrunozzi wrote:
| So, good time to buy on the panic?
| czbond wrote:
| If 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 wrote:
| Thank you stock astrologist
| czbond wrote:
| In know you're in jest, but no worries. Strong support
| around $17 for lots of reasons - would be difficult to push
| it below that.
|
| In fact there is an open gap that I'd expect it to close
| around $16.30 and another one around $19
| brcmthrowaway wrote:
| How did you learn algotrading?
| daedrdev wrote:
| Id like to sell you a bridge
| simonw wrote:
| I'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 wrote:
| The 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
|
| edit: not sure if this was sarcasm
| simonw wrote:
| Some 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
|
| MiniMax M1 used 512 H800s. 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-
| ch...
|
| Z.ai say they used Huawei hardware: https://www.theregister.c
| om/2026/01/15/zhipu_glm_image_huawe...
|
| Qwen and Kimi haven't disclosed their hardware as far as I
| can tell.
| tyre wrote:
| If 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-intell...
| tcdent wrote:
| I'm kindof surprised by this take.
|
| Did you think the hesitancy of westerners engaging and relying
| on Chinese labs was due to vibes? There are fundamental
| cultural differences at play, wether we are comfortable
| admitting that or not.
| platinumrad wrote:
| If you're so brave, you should state what these fundamental
| cultural differences are.
| peyton wrote:
| Simon, love your work. Hope this is sarcasm. If not, imagine
| the opposite: Sam Altman and co suddenly started producing tons
| of content about how smart they are in Mandarin. Why do they
| even need a story to begin with, let alone one they push
| halfway around the world?
|
| The $2.5B number is just these guys. It could be 10x in total.
| platinumrad wrote:
| Of course they're using the best chips they can get, but this
| is a bizarre theory. English is the lingua franca of
| scientific publishing.
| segmondy wrote:
| combination of both, they published papers so we can clearly
| see they are not just duplicating old methods but coming up
| with new optimizations. ... yet we can't rule out that they
| used Nvidia. I don't even see how the export restrictions work,
| it's stupid. A Chinese company can go to another country, say
| France or Canada, setup a business buy a bunch of GPUs then
| make it available to their subsidiary in China. The export
| restrictions doesn't restrict usage/sharing/renting as far as I
| know...
| whatevaa wrote:
| They don't work. Chinese are skilled enough to desolder and
| smuggle just the ships themselves. They make the rest of GPU
| in-house. With more VRAM than the nvidia offers, comically,
| in case of 4090.
| monocasa wrote:
| They definitely are using Nvidia. Part of deepseek's special
| sauce was using an "undocumented" ptx instruction to get a
| cute microoptimization with the memory hierarchy.
|
| https://youtube.com/watch?v=iEda8_Mvvo4
| Namahanna wrote:
| The Gamers Nexus GPU Blackmarket deep dive was great at digging
| into this. https://www.youtube.com/watch?v=1H3xQaf7BFI
|
| And the entire Bloomberg takedown drama added fire to the flames.
| hangonhn wrote:
| Yeah what as the story behind the BBerg take down drama? I just
| remember it being something absurd.
| ipsum2 wrote:
| He used a clip from Bloomberg without permission.
| noir_lord wrote:
| He used a clip legally under fair use without permission,
| which you don't need if it is under fair use.
| cogman10 wrote:
| I'd just add, it was like a 1 minute clip in like a 2 or
| 3 hour video.
| dessimus wrote:
| Equally important, it was of a US government official
| speaking, not content Bloomberg specifically created,
| such as one of their employees giving analysis.
| matkoniecz wrote:
| Worth noting that it was entirely legal do so, due to fair
| use rules.
| anonymousiam wrote:
| The 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.
| Namahanna wrote:
| GN used Bloomberg clips of US Gov officials speaking on AI
| chip matters, fully under fair use.
|
| And Bloomberg did a DMCA takedown through youtube, copystrike
| in parlance which pulled the video down for a week. GN had no
| recourse other than to wait and counterclaim.
|
| Week timed out, Bloomberg did nothing but be the bully.
|
| Louis Rossmann's excellent explainer video here on the
| Bloomberg bit: https://www.youtube.com/watch?v=6RJvrTC6oTI
| nazgulsenpai wrote:
| They did have the video uploaded to archive.org (or at
| least link to someone else who did) and gave permission to
| anyone else to repost it. Which is how I saw it, some rando
| burner account on YouTube :)
| gruez wrote:
| >Louis Rossmann's excellent explainer video here on the
| Bloomberg bit: https://www.youtube.com/watch?v=6RJvrTC6oTI
|
| As always, Louis is being a bit sensationalist and
| stretches the truth to whip up outrage. Contrary to what he
| claims, GN could have easily quoted the president without
| Bloomberg's video, and that would be fine. "that outlet now
| has a monopoly on who is able to quote the president" is
| just a totally false premise. Moreover he tries to argue
| that GN's video falls under fair use, because it's a 1
| minute clip in a 3 hour video. However it's not hard to
| think of a rebuttal to this. If news organizations can copy
| each other's clips of official speeches, who would bother
| going out and making such recordings? Usually how this
| would be resolved would be by citing precedents, but he
| doesn't bother citing any.
| timschmidt wrote:
| > If news organizations can copy each other's clips of
| official speeches
|
| Brother, wait until you learn about the associate press.
|
| In U.S. copyright law, the four factors evaluated to
| judge fair use are:
|
| 1: Purpose and character of the use: including whether
| the use is commercial or nonprofit educational, and
| whether it is transformative.
|
| 2: Nature of the copyrighted work: for example, whether
| the work is more factual or more creative.
|
| 3: Amount and substantiality used: both how much was
| taken and whether it was a qualitatively important part
| of the work.
|
| 4: Effect on the market: whether the use harms the
| potential market for or value of the original work.
|
| Courts weigh all four factors together. There is no fixed
| rule like "under 30 seconds" or "under 10%." GN's use
| seems to satisfy all four factors.
| gruez wrote:
| >Brother, wait until you learn about the associate press.
|
| The same AP that _licenses_ content to its members and
| charges non-members for the privilege of reusing their
| content?
|
| "Many newspapers and broadcasters outside the United
| States are AP subscribers, paying a fee to use AP
| material without being contributing members of the
| cooperative. As part of their cooperative agreement with
| the AP, most member news organizations grant automatic
| permission for the AP to distribute their local news
| reports. "
|
| > GN's use seems to satisfy all four factors.
|
| It's weakest at #1 and #4.
|
| #1: it's a commercial piece of work (so far as I can tell
| GN isn't a non-profit), and the use of the clip
| specifically isn't critical to the work. If you're
| critiquing a movie or something, and need to show a
| screengrab to get your point across, then that makes
| sense, but if the purpose of the video is just to
| establish "Trump said this", the video isn't really
| needed.
|
| #4: see above regarding making recordings of official
| speeches.
|
| Moreover I'm not trying to argue that GN is definitely
| not fair use, only that there's a plausible case
| otherwise. If there's actual disagreement over it's fair
| use or not, then the DMCA process is working as intended,
| and Bloomberg isn't abusing it as Louis implies.
| timschmidt wrote:
| Yeah yeah, everyone enforces their copyrights to the
| maximum extent possible. But this does not prevent
| massive amounts of both licensed copying and free use
| copying. The framework I outlined above is from the US
| Supreme Court's rulings on fair use so applies for
| everyone in the US.
|
| [responses to edited-out portion of parent comment]
|
| Re: #1, GN's work while commercial is an educational
| investigative journalism / documentary piece which are
| well established users of Free Use protection. GN's use
| is absolutely transformative.
|
| #4: Bloomberg would have to prove a financial loss to
| have standing. That would mean that GN must have no other
| option than to use Bloomberg's clip, and pay the license,
| which I don't think would fly. GN would have just
| produced the segment differently.
| gruez wrote:
| >[responses to edited-out portion of parent comment]
|
| readded.
|
| edit: responses
|
| >Re: #1, GN's work while commercial is an educational
| investigative journalism / documentary piece which are
| well established users of Free Use protection. GN's use
| is absolutely transformative.
|
| I'm not going to argue too hard over whether taking a 1
| minute clip for a 3 hr video counts as "transformative"
| because this is getting enough into the legal weeds that
| you'd want to start citing precedents, rather than having
| two armchair lawyers duking it out with random arguments.
|
| That said, "investigative journalism / documentary piece"
| angle seems weak. It's not more "educational" than any
| other news organization (eg. Bloomberg or The New York
| Times), but apparently they still go out to record
| speeches, even though they can supposedly piggy back off
| another organization's footage under fair use.
|
| >#4: Bloomberg would have to prove a financial loss to
| have standing. That would mean that GN must have no other
| option than to use Bloomberg's clip, and pay the license,
| which I don't think would fly. GN would have just
| produced the segment differently.
|
| Right, but the purpose of DMCA is to take down infringing
| works, not to award damages. Whether they have losses or
| not is irrelevant. Moreover the implied argument of "it
| might be copyright infringement but Bloomberg isn't
| losing any money so they shouldn't be able to do
| takedowns" seems... questionable.
| timschmidt wrote:
| With regard to whether or not a work is transformative,
| the Supreme Court's formulation from Campbell v. Acuff-
| Rose, a case about parody, asks whether the new work
| merely supersedes the original, or instead adds something
| new, with a further purpose or different character,
| altering the first with new expression, meaning, or
| message.
|
| A practical way to think about it is this:
|
| What is the new use for? Courts look first at whether the
| secondary use serves a different purpose from the
| original, not just whether it looks different. Uses for
| criticism, commentary, parody, scholarship,
| search/indexing, or other new functions often have a
| stronger transformative argument.
|
| Is there new expression, meaning, or message? That still
| matters, but after Warhol, a claimed new meaning by
| itself is usually not enough, especially when the
| secondary use is being exploited in a similar commercial
| market as the original. The Court emphasized that the
| inquiry is tied to the specific use at issue and whether
| that use has a distinct purpose.
|
| Does it substitute for the original in the same market?
| Even if the new work has some new meaning, it looks less
| transformative if it is serving basically the same
| licensing or audience function as the original. That
| overlaps with factor 4 as well.
|
| How much was taken, and was that amount justified by the
| new purpose? A use is more defensible when it takes only
| what is reasonably needed for the transformative aim. In
| parody, for example, some copying may be necessary to
| "conjure up" the original, but not more than needed.
|
| All of which I think can fairly be evaluated in GN's
| favor. Though as you point out, the lawyers are paid to
| argue each point.
| rmoriz wrote:
| A couple of years ago Bloomberg reported about spy chips/hw
| backdoors in SuperMicro mainboards but to my knowledge without
| a smoking gun proof. Maybe they had to settle outside of court
| and also had to sign papers to help protect the company from
| further damage in the future. Using (other) Bloomberg material
| may have triggered this. Of course this is a wild speculation.
| I have no evidence or insider knowledge.
| maxglute wrote:
| They need a new logo.
| phendrenad2 wrote:
| Maybe it's time to re-visit that "spy chip" story from almost a
| decade ago.
|
| Edit: Officially-debunked, I should note
| CamperBob2 wrote:
| Yes, debunked or at least never backed up any actual evidence.
|
| (Allegedly) just some Bloomberg (alleged) bullshittery,
| (allegedly) posted to move the market.
| monocasa wrote:
| Well, 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.
| midtake wrote:
| Whenever some soylent-drinking, impossible foods-eating
| dilettante says "debunked" I find myself not fully believing
| them. And Supermicro has always been sus. I can't believe
| people are only just now noticing.
| latchkey wrote:
| I'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 wrote:
| (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 wrote:
| They 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 wrote:
| Mostly 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 wrote:
| well, 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 wrote:
| If engines are hard to build, why not build a car 3x the size
| of a normal one, well you can but due to things like
| aerodynamics, etc etc you'll never match the speed or fuel
| economy of cars.
|
| Same with chips, efficiency, speed, etc all depend on good
| design, and cutting edge factors, if the main reason your chip
| isn't faster is because of the distance between your L1 cache
| and your core is far, then having a bigger node process but
| bigger chip won't make it quicker.
| dixie_land wrote:
| Exactly, you can build 12nm but you can't quadruple the speed
| of light
| markhahn wrote:
| Copying CPUs isn't really a thing: they are too complex.
|
| If you could steal all the designs at TSMC, and you had exactly
| the process that TSMC uses, you could definitely make
| counterfeits. If you didn't have TSMC's specific process, you
| could adapt the designs (to Intel or Samsung) with serious but
| not epic effort. If you couldn't make the processes similar
| (ie, want to fab on SMIC), you are basically back to RTL, and
| can look forward to the most expensive and time-consuming part
| of chip design.
|
| This is nothing like copying a trivial, non-complex item like a
| car. Copying a modern jet engine is starting to get close (for
| instance, single-crystal blades), but even they are much
| simpler. I mention the latter because the largest, most
| resourced countries in the world have tried and are still
| trying.
| monocasa wrote:
| They have done a bit of this. SMIC is basically operating off
| of a cloned TSMC N7 node that they have since iterated on to
| get to a 5nm class node.
| whaleofatw2022 wrote:
| But its still such a complex sort of beast.
|
| Even if you had 'ai tools' guessing at component blocks on
| evaluation you would have to have some evaluation of the
| result.
|
| And, thats assuming NVDA hasn't pulled a Masatoshi Shima
| type play on their designs (i.e. complex traps that could
| require lots of analysis to determine if they are real or
| fake)
|
| Im not sure how much of a speedup even modern
| tooling/workflow could do reliably.
|
| Even then,
|
| The elephant in the room is that China is working on their
| own AI accelerators/etc, so while there can be benefit from
| -studying- the existing designs, however I think they do
| not want to clone regardless.
| monocasa wrote:
| Oh, absolutely. Straight up soviet style cloning of masks
| makes no sense for multitude of reasons. In addition to
| what you've said, China isn't banned from N7 class Nvidia
| architectures so could just buy those on the open market.
| post-it wrote:
| At 3 GHz, a signal can travel at most 10 cm per clock cycle.
| You can't really physically scale a chip up.
| jasonwatkinspdx wrote:
| You can you just have to use a tiled architecture. And
| microprocessors already have far shorter wiring distances
| than the simple speed of light calculation because it takes
| time for the gates to make the transition as well.
|
| With processors it's customary to use the "Fan out of 4"
| metric as a measurement of the critical paths. It's the
| notional display for a gate with fan out of 4, which is the
| typical case for moving between latches/registers.
| Microprocessor critical paths are usually on the scale of ~10
| FO4.
|
| The largest chip at the moment is Cerebras's wafer scale
| accelerator. There the tile is basically at the reticule
| limit, and they worked with TSMC to develop a method to wire
| across the gaps between reticules.
| kcb wrote:
| Another factor, it's not just GPUs it's the full hardware
| stack. https://static.tweaktown.com/news/1/1/110521_2_nvidia-
| update...
| jasonwatkinspdx wrote:
| > Can someone shed light on why China still couldn't copy the
| Nvidia GPUs in some form?
|
| They have alternatives, like the Tian supercomputer was
| originally built with Xeon Phi chips that have been replaced
| with their own domestic alternatives.
|
| A big limitation is getting access to fab slots. Nvidia and
| Apple are very aggressive about buying up capacity from TSMC,
| etc, and China's own domestic fabs are improving fast but still
| not a real match, particularly for volume.
| markhahn wrote:
| interesting 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...
| hereme888 wrote:
| Having a net worth of ~$474 million just isn't enough for some
| people, I guess.
| avidruntime wrote:
| MICE 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 wrote:
| I 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.
| WarmWash wrote:
| Ultra 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.
| hereme888 wrote:
| interesting insight
| WarmWash wrote:
| People are commonly in it for the money, so they naturally
| project this on the ultra-wealthy. But you will (almost)
| never get to ultra-wealthy status without some other
| external drive. Everyone else hits $20M, set for life,
| checks out and retires.
|
| All these billionaires are unfathomably rich, and still
| slamming 60-80hr work weeks. They are not in it for the
| money.
| 0xy wrote:
| More likely he was subject to blackmail or threats by the CCP.
| throwaway27448 wrote:
| Violating 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 wrote:
| > 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?
| kube-system wrote:
| > 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 wrote:
| I 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 wrote:
| For a split second I read that as Super Mario shares
| chourobin wrote:
| same!
| deepsquirrelnet wrote:
| This is even after the Hindenburg research report that found
| numerous screaming red flags a few years ago.
|
| https://hindenburgresearch.com/smci/
| whacko_quacko wrote:
| Not 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.
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