NVIDIA Starts Diverting Orders Away From Super Micro Computer (SMCI) As A Potential Delisting And DOJ Investigation Loom Large

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Super Micro Computer (SMCI), a retailer of high-performance servers and liquid-cooled AI racks, is NVIDIA's third-largest customer. Additionally, in what is a testament to the heretofore symbiotic relationship between these two entities, SMCI's biggest client is NVIDIA, and its second-biggest client is an entity that is backed by NVIDIA. Now, however, it appears that NVIDIA has had enough of Super Micro Computer's near-constant headaches, and is deliberately trying to create some much-needed distance.

Related Story The Recent Super Micro Computer (SMCI) Debt Covenant Change Hints At Further Annual Report Filing Delays

To wit, Digi Times is reporting today that NVIDIA has begun redirecting its orders that were originally placed with Super Micro Computer to other suppliers. This development comes as SMCI is now contending with allegations of financial malfeasance, a preliminary DOJ investigation, the exodus of its second auditor in around 18 months, and an imminent de-listing from the Nasdaq exchange.

For the benefit of those who might not be aware, Super Micro Computer's travails began in August when Hindenburg Research detailed instances of alleged accounting fraud and corporate governance malfeasance in a detailed report. SMCI then delayed the filing of its annual report for the fiscal year that ended on the 30th of June, presumably in a bid to undertake an internal review. Do note that under the prevailing statutory requirements, SMCI's annual report had to be filed by the 30th of August.

Meanwhile, the DOJ has also reportedly launched an investigation into the affairs at Super Micro Computer, with a particular focus on the alleged accounting violations. As per Hindenburg Research's anecdotes, Super Micro Computer engaged in distribution channel stuffing by pushing products to distributors based on artificially inflated demand