Two Chinese Nationals Charged in California for Smuggling $28M Worth of Nvidia AI Chips to China

Two Chinese nationals, Chuan Geng and Shiwei Yang, have been charged with smuggling Nvidia AI chips worth $28 million to China in violation of US export controls. The alleged scheme involved more than 20 shipments from October 2022 to July 2025. Nvidia and Super Micro Computer have responded, stating they comply with US export control regulations and are cooperating with authorities. The case follows reports of over $1 billion in Nvidia chips being smuggled to China.

Two Chinese nationals, Chuan Geng and Shiwei Yang, have been charged with smuggling Nvidia AI chips worth $28 million to China, violating US export controls. The alleged scheme involved more than 20 shipments from October 2022 to July 2025. The US Department of Justice (DOJ) accused the defendants of "knowingly and willfully" exporting the graphic processing units (GPUs) used in artificial intelligence without authorization [1].

The illicit shipments included Nvidia's H100 GPUs, described as the most powerful chips on the market. The DOJ stated that the shipments were falsely labeled and did not obtain the necessary license from the US Department of Commerce. The defendants allegedly organized the shipments through their El Monte, California-based company, ALX Solutions Inc, which received payments from firms in Hong Kong and China instead of the companies that accepted the shipments [1].

Nvidia and Super Micro Computer have responded, stating they comply with US export control regulations and are cooperating with authorities. The case follows reports of over $1 billion in Nvidia chips being smuggled to China, highlighting the ongoing struggle to enforce export controls [1][2].

The US government has banned the export of advanced chips to China amid a heated battle for technological supremacy between Washington and Beijing. The DOJ's action underscores the challenges in enforcing these restrictions, with smuggling routes through Southeast Asian nations like Malaysia and Thailand being a significant concern [2].

The US is considering embedding location-tracking technology directly into high-end chips as a new approach to curb AI hardware smuggling to China. This move comes as years of export controls have failed to fully stop illicit shipments, leaving policymakers seeking more effective solutions [2].

The case of Chuan Geng and Shiwei Yang serves as a reminder of the complexities and challenges in enforcing export controls, particularly in the high-stakes realm of advanced semiconductor technology. The ongoing battle for technological supremacy between the US and China will likely continue to shape global trade and geopolitical relations [1][2].

References:
[1] https://www.aljazeera.com/economy/2025/8/6/us-charges-chinese-nationals-with-illegally-shipping-nvidia-chips-to-china
[2] https://www.tomshardware.com/tech-industry/white-house-considering-chip-tracking-to-curb-ai-hardware-smuggling-to-china-amid-enforcement-gaps-software-or-hardware-tracking-could-be-next-step-in-u-s-export-controls-over-leading-edge-ai-silicon