U.S. Arrests Two Chinese Nationals for Smuggling Nvidia AI Chips to China: What You Need to Know

Two Chinese nationals in California have been arrested for illegally shipping advanced AI chips to China. Chuan Geng and Shiwei Yang, both 28, allegedly exported tens of millions of dollars’ worth of Nvidia chips from October 2022 through July 2023 without the necessary licenses, according to the Department of Justice.

These chips include Nvidia’s H100, known for its role in artificial intelligence. Since 2022, the U.S. government has imposed strict export controls on advanced semiconductors to limit China’s access to cutting-edge technology. Nvidia condemned these actions, stating that they only sell to reputable partners to ensure compliance with U.S. laws.

Geng and Yang operated a company called ALX Solutions, which they started shortly after the new export restrictions were enacted. Investigations revealed that the duo was concealing shipments by routing them through Malaysia and Singapore, countries often used to hide illicit exports to China. Law enforcement found incriminating communications on their seized phones, indicating their intent to evade U.S. regulations.

Both men face serious charges under the Export Control Reform Act, which can lead to up to 20 years in prison. Moreover, it was discovered that Yang was in the U.S. illegally after overstaying her visa.

The smuggling of advanced tech has become a significant concern for U.S. lawmakers. Recent reports indicate that over $1 billion worth of Nvidia chips have been shipped to China since stricter controls were implemented. Nvidia has warned that data centers built with smuggled chips are unreliable and that they do not support unauthorized products.

In response to U.S. pressure, Malaysia announced new regulations requiring permits for trading advanced AI chips sourced from the U.S. This reflects a growing trend among countries to tighten control over tech exports, highlighting the ongoing tensions in global tech supply chains.

As the demand for AI technologies surges, these developments underline the importance of adherence to export regulations—both for national security and the integrity of global tech markets.



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