Chinese Nationals Charged for Illegally Exporting Nvidia AI Chips

Two Chinese nationals were charged by the US Department of Justice for allegedly smuggling tens of millions of dollars worth of Nvidia's H100 GPUs to China without a proper license through a company based in El Salvador. They face up to 20 years in prison for the illegal export of US technology. The GPUs are used for artificial intelligence applications.

Two Chinese nationals, Chuan Geng and Shiwei Yang, have been charged by the U.S. Department of Justice for allegedly smuggling tens of millions of dollars worth of Nvidia's H100 GPUs to China without the proper export license. The pair faces up to 20 years in prison for the illegal export of U.S. technology. The GPUs are used for artificial intelligence applications.

The charges were brought against Geng, a permanent resident of Pasadena, California, and Yang, who overstayed her visa and was arrested in El Monte. They were arrested for allegedly exporting the sensitive technology through their El Monte-based company, ALX Solutions Inc. The company was founded in 2022, shortly after the U.S. imposed sweeping export controls on technology to China and began to require licenses for the chips.

The criminal complaint states that the defendants shipped Nvidia-designed chips, including the company’s H100 AI accelerators, which power computers that create and run artificial intelligence software. These specific chips require official approval for sales to certain countries.

Over 20 shipments from ALX Solutions went to shipping and freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods to China. ALX received a $1 million payment from a China-based company in January 2024 and other payments from companies in Hong Kong and China, not the freight forwarding companies.

Geng and Yang appeared in U.S. District Court in Los Angeles on Monday. Geng was released on $250,000 bond, while Yang has a detention hearing scheduled for August 12. Their arraignment is scheduled for September 11.

The H100 GPUs are advanced chips that can be used to train large language models and for other applications, such as developing self-driving cars and medical diagnosis systems. Records show that from at least August 2023 to July 2024, ALX Solutions bought over 200 Nvidia H100 chips from San Jose, California-based server maker Super Micro Computer, declaring that the end users were in Singapore and Japan.

References:
[1] https://ca.finance.yahoo.com/news/two-chinese-nationals-california-accused-193312016.html
[2] https://www.investing.com/news/stock-market-news/chinese-nationals-charged-with-illegal-export-of-nvidia-ai-chips--bloomberg-93CH-4171159
[3] https://www.foxnews.com/politics/illegal-immigrant-chinese-national-tried-stealing-sensitive-ai-microchips-doj-says