US DOJ Arrests Two Chinese Nationals for Illegally Shipping Nvidia AI Chips to China
The U.S. Department of Justice has arrested two Chinese nationals, Chuan Geng and Shiwei Yang, in California for allegedly exporting tens of millions of dollars worth of advanced Nvidia AI chips, including the high-powered Nvidia H100 GPUs, to China in violation of U.S. export controls. The accused operated ALX Solutions Inc., a company based in El Monte, California, founded in 2022 shortly after the U.S. imposed strict restrictions on semiconductor exports to China. They are charged under the Export Control Reform Act and could face up to 20 years in prison.
Circumventing U.S. Export Controls Through Transshipment
According to the DOJ, Geng and Yang shipped the AI chips to freight forwarders in Singapore and Malaysia before final delivery to China, a tactic used to evade U.S. export licensing requirements. Over 20 shipments were made without obtaining the necessary Commerce Department licenses. The defendants received payments from companies in China and Hong Kong, including a notable $1 million payment in January 2024. The Nvidia H100 GPUs are among the most powerful AI processors on the market, essential for applications such as large language model training, autonomous vehicles, and medical diagnostics, and are strictly controlled by U.S. regulations.
Legal Proceedings and Industry Response
Both defendants have been arraigned, with Geng released on a $250,000 bond and Yang facing a detention hearing. The DOJ seized their company’s phones and found evidence of continued discussions to export controlled chips illegally. Nvidia stated that it sells products only to authorized partners complying with export rules, noting any unauthorized shipments would lack support or updates. The case underscores rising U.S. efforts to prevent the unauthorized transfer of cutting-edge AI technology to China amid geopolitical tensions and export control enforcement.
This development is significant for the semiconductor industry, export control regulators, and policymakers monitoring technology transfer and international AI competition risks.