NEW YORK, NY – The U.S. Department of Justice has launched an investigation into Super Micro Computer, a leading AI server maker, following allegations of “accounting manipulation” made by short-seller Hindenburg Research. Reports from sources familiar with the matter suggest that the probe is in its initial stages, with a prosecutor from a U.S. attorney’s office reaching out to individuals with relevant information.

After news of the investigation broke, Super Micro’s shares plummeted nearly 17%, causing concern among investors and analysts. The company had recently postponed filing its annual report in order to assess its internal financial controls, following accusations of accounting violations by Hindenburg Research.

Hindenburg’s claims against Super Micro included accusations of undisclosed related-party transactions and violations of export controls, painting a troubling picture of the company’s operations. Despite these allegations, Super Micro denied any wrongdoing, maintaining its innocence in the matter.

Interestingly, a review of tender documents earlier this year revealed that Chinese entities had acquired high-end Nvidia chips from various companies, including Super Micro, through resellers. This acquisition of sensitive technology raised concerns within the U.S. government, which has been vigilant in preventing the sale of such products to China.

Super Micro’s involvement in the generative AI sector has positioned the company as a key player in the industry’s growth. However, the recent cooling off of the AI stock market has led to a reevaluation of expectations, with investors recalibrating their projections for companies like Super Micro.

As the investigation unfolds, stakeholders will be closely monitoring developments to assess the potential impact on Super Micro and the broader AI market. Details surrounding the probe and any subsequent actions taken will likely have significant implications for the company and its investors.