Two Chinese Nationals Charged in Major Nvidia AI Chip Smuggling Case to China

Two Chinese nationals were arrested for allegedly smuggling powerful AI chips to China, according to the US Department of Justice (DOJ). The suspects, Chuan Geng and Shiwei Yang, reportedly ran a company called ALX Solutions. Over three years, they exported advanced Nvidia chips without proper licenses.

Nvidia’s H100 graphics processing units (GPUs) are at the center of this crackdown. These chips are subject to strict US export controls designed to prevent their sale to China. An Nvidia spokesperson highlighted that smuggling attempts would be futile, as they ensure compliance with regulations.

Court documents reveal that ALX Solutions had three employees, with Geng and Yang making key decisions. Geng is a permanent resident of California, while Yang had overstayed her visa. The DOJ explained that the company shipped products through Singapore and Malaysia, often using these places as transit points to hide illegal shipments bound for China.

Interestingly, ALX didn’t receive payments directly from the shipping firms. Instead, they were paid by companies based in Hong Kong and China. One notable payment reported was $1 million from a China-based firm last January.

In a notable shipment in December, ALX attempted to send export-restricted chips, which US customs intercepted. ALX never sought a license from the Commerce Department, which is mandatory for such shipments. An invoice from 2023 valued at over $28.4 million suggested the chips were meant for a customer in Singapore, but US authorities could not verify that the customer existed.

Super Micro, a supplier of Nvidia chips, stated it is committed to complying with export regulations and would assist law enforcement as needed.

After their arrests, Geng and Yang appeared in federal court in Los Angeles. If convicted, they could face up to 20 years in prison.

As AI technology grows, so do concerns about its misuse. The DOJ’s enforcement actions underscore the government’s effort to control the flow of advanced technology to potentially adversarial nations. According to a recent report by the Center for Strategic and International Studies, the competition over AI technology is escalating, with global efforts to control sensitive tech becoming increasingly vital.

The case highlights the risks involved in the high-stakes world of tech exports and sets a precedent for future investigations into such operations.



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