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Two Chinese nationals have been arrested and charged by the US Department of Justice (DOJ) for allegedly orchestrating an illegal scheme to export millions of dollars’ worth of high-end Nvidia artificial intelligence (AI) chips to China.
The charges highlight ongoing efforts to circumvent strict US export controls aimed at preventing Beijing from acquiring cutting-edge technology.
The DOJ announced on Tuesday that Chuan Geng and Shiwei Yang, who allegedly operated a company called ALX Solutions, had illegally shipped chips from the US to China over a three-year period without the required licenses.
Court documents reveal that the shipments included Nvidia’s powerful H100 graphics processing units (GPUs), which are central to advanced AI development, along with GeForce RTX 4090 GPUs.
An Nvidia spokesperson emphasized the company’s commitment to preventing such illicit activities, stating that “smuggling its chips is a nonstarter.”
The spokesperson added that Nvidia sells products to “well-known partners who help to ensure that all sales comply with US export control rules,” and that “any diverted products would have no service, support or updates.”
According to the court documents, ALX Solutions allegedly routed goods through transit hubs in Singapore and Malaysia – countries identified by the DOJ as commonly used to “conceal illegal shipments” to China.
Payments for these illicit transactions reportedly came from companies based in Hong Kong and mainland China. In one instance, a 2023 invoice for over $28.4 million allegedly declared chips for a non-existent Singapore-based customer, suggesting a deliberate attempt to mislead authorities.
Ms. Yang was arrested on Saturday, and Mr. Geng surrendered shortly after. Both appeared in federal court in Los Angeles on Monday. If found guilty, they could face up to 20 years in prison, underscoring the serious legal ramifications of violating US export control laws. This case serves as a clear signal of the US government’s resolve to enforce its technological restrictions.
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