Super Micro targets federal sector, despite US government’s probe into its business
Super Micro (SMCI) is the latest AI company to seek out opportunities with the US government, saying last week that it has launched a new business unit that will be focused on delivering solutions to federal agencies.
Called Super Micro Federal LLC, the new entity will aim to deliver domestically manufactured high-performance and energy-efficient solutions to American government agencies.
The company said that its expansion into a government-focused strategy “deepens its commitment to American innovation, domestic manufacturing and supply chain.”
CoreWeave (CRWV) also announced its intention to enter the public sector last week, saying that it will begin focusing on delivering secure and compliant high-performance AI cloud services to US government agencies, as well as their key partners, through a new program called CoreWeave Federal.
In its press release announcing the new federal unit, Super Micro emphasized its U.S.-based operations, which is a key priority for the Trump administration’s AI initiatives.
The company noted that having an engineering team in the U.S. enables “faster time-to-market and time-to-online for the federal government.”
It also highlighted its “strong manufacturing capabilities in the U.S.” and pointed to its San Jose, California headquarters and recent Silicon Valley expansion as proof of its growing domestic footprint.
Super Micro added that it’s “exploring new manufacturing facilities in the U.S. to meet increasing demand.”
“These efforts reflect the company's commitment to advancing American manufacturing and domestic job creation,” the company said.
"Supermicro is committed to supporting the U.S. federal government in powering its next generation of technical initiatives," Charles Liang, president and CEO of Supermicro, said in a statement.
"Through this initiative, Supermicro will supply US federal government agencies with full data center IT solutions that are manufactured and tested from our manufacturing facilities in Silicon Valley, California.”
An olive branch to the government?
The timing of Super Micro’s pivot to building solutions for federal agencies comes at an interesting time for the company considering that it’s actually been under a recent investigation by the US government.
The US Justice Department (DOJ) opened a probe in September 2024 after activist short-seller Hindenburg Research published a report in August saying that it found "glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export-control failures, and customer issues," asThe Wall Street Journal reported.
Ernst & Young, which had served as Super Micro's auditor, then quit a month after the DOJ launched its investigation, raising concerns over the company's corporate governance, accounting practices and the board's independence from Liang.
EY's concerns were actually raised before the report from Hindenburg Research was released.
It’s not clear where the DOJ’s investigation currently stands since it was initially launched during the Biden administration — and the department came under new leadership when Trump took office.
Super Micro has made its name as a go-to commercial supplier of artificial intelligence servers and direct liquid cooling (DLC) solutions for AI data centers — a critical part of the growing AI infrastructure.
It counts Elon Musk's xAI as one of its customers. Super Micro’s stock is up 70.5% for the year.