Nvidia AI Chips Exported to China by US-Based Firm, Three Arrested

Three Chinese nationals have been charged with exporting Nvidia AI chips to China, violating US export control rules. The individuals, who worked for California-based ALX Solutions, allegedly sent goods to shipping firms in Singapore and Malaysia to conceal illegal shipments to China. If found guilty, they could face up to 20 years in prison. Nvidia sells products to well-known partners who ensure compliance with US export control rules.

Three Chinese nationals have been charged with exporting Nvidia AI chips to China, violating U.S. export control rules. The individuals, who worked for California-based ALX Solutions, allegedly sent goods to shipping firms in Singapore and Malaysia to conceal illegal shipments to China. If found guilty, they could face up to 20 years in prison. Nvidia sells products to well-known partners who ensure compliance with U.S. export control rules.

The U.S. Justice Department alleges that Chuan Geng, 28, and Shiwei Yang, 28, exported tens of millions of dollars' worth of advanced AI chips, including Nvidia H100s, to China from October 2022 through July 2025 without obtaining the required licenses from the U.S. Commerce Department [1].

ALX Solutions, founded in 2022, made over 20 shipments to freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods destined for China. The company received a $1 million payment from a China-based company in January 2024, raising suspicions about the true recipients of the shipments [1].

The smuggled chips included Nvidia H100s, which are advanced processors used for training large language models and other AI applications such as developing self-driving cars and medical diagnosis systems. The pair are also accused of illegally shipping Nvidia video graphics cards known as PNY GE Force RTX 4090, which also require a license for export to China [1].

The case unfolded like a spy thriller, with a mislabeled pallet caught by Long Beach customs in December 2024 leading to a series of investigations. Federal agents executed a search warrant and found evidence of roughly a thousand premium GPUs being shipped, with a street value of over $25 million [1].

Geng, a lawful permanent resident, was released on a $250,000 bond, while Yang, who had overstayed her visa, remains in custody pending a detention hearing on August 12. Both face charges under the Export Control Reform Act, which carries penalties of up to 20 years in prison [1].

This case highlights the ongoing tensions between the U.S. and China in the race for AI supremacy. It also underscores the challenges in enforcing export controls on advanced technology, as reports suggest that despite restrictions, at least $1 billion worth of Nvidia chips were smuggled into China in the three months following a recent ban [1].

References:
[1] https://theoutpost.ai/news-story/chinese-nationals-arrested-in-california-for-illegal-export-of-advanced-nvidia-ai-chips-to-china-18704/