On Aug. 5, the Justice Department announced the arrest of two Chinese nationals in California — one reportedly in the U.S. illegally — accused of smuggling tens of millions of dollars’ worth of high-end Nvidia artificial intelligence chips to mainland China, evading U.S. export restrictions.
The two are accused of allegedly shipping advanced chips, including the Nvidia H100 GPU and Nvidia 4090 GPU, to China between Oct. 2022 and July 2025 through an El Monte-based company, ALX Solutions, an affidavit filed in Los Angeles reads.
Shiwei Yang, 28, and Chuan Geng, 28, are charged with violating the Export Control Reform Act and face a maximum sentence of 20 years in a federal prison.
The two handed themselves over to authorities on Tuesday. Yang is an illegal alien who overstayed her visa and Geng is a permanent resident.
The complaint says the smuggled chips were the “most powerful GPU chip on the market… designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.”
Success
You are now signed up for our newsletter
Success
Check your email to complete sign up
“This case demonstrates that smuggling is a nonstarter. We primarily sell our products to well-known partners, including OEMs [original equipment manufacturers], who help us ensure that all sales comply with US export control rules,” an Nvidia spokesperson told The New York Post.
“Even relatively small exporters and shipments are subject to thorough review and scrutiny, and any diverted products would have no service, support, or updates.”
RELATED:
- Trump Calls for Intel CEO Lip-Bu Tan’s Immediate Resignation Over China Ties
- Biden Admin Likely to Blacklist NVIDIA AI Chip Exports to China
Skirting export restrictions
Last May, the Trump administration imposed export restrictions on advanced hardware to China in an attempt to undermine communist China’s advancement in artificial intelligence (AI).
Despite these efforts, and others, China continues to figure out ways to procure the essential chips, including an incident last month when it was discovered that Chinese entities managed to import Nvidia chips worth upwards of $1 billion.
“The powerful chips were still being sold by Chinese suppliers to data center operators – even after the controls took hold, according to a Financial Times analysis of sales contracts, company filings and interviews with sources with direct knowledge of the deals,” the NY Post reported.
The company the two Chinese nationals were operating, ALX Solutions, was established in 2018, shortly after the Commerce Department began requiring licenses for advanced microchips.
ALX Solutions allegedly routed a minimum of 20 shipments from the U.S. by using freight-forwarding companies in Singapore and Malaysia, according to the Department of Justice.
The complaint states that devices belonging to the two Chinese nationals contained conversations in which they discussed strategies to evade U.S. export restrictions.
Geng has been released on a $250,000 bond and Yang remains incarcerated, awaiting a detention hearing on Aug. 12. Both of their arraignments are slated for Sept. 11.
