Chinese Nationals Arrested for Smuggling Advanced Nvidia AI Chips to China

Two arrested for smuggling AI chips to China; Nvidia says no to kill switches | TechCrunch

The U.S. Department of Justice (DOJ) said on Tuesday that two Chinese nationals have been arrested for their alleged involvement in illegally shipping "tens of millions of dollars" worth of high-performance AI chips to China. The DOJ said Chuan Geng and Shiwei Yang were arrested in California on August 2 and charged with violating the Export Control Reform Act, a felony that carries a statutory penalty of a maximum of 20 years in prison. Geng and Yang are accused of knowing and willfully shipping "sensitive technologies," including GPUs, to China from the U.S. through their California-based company, ALX Solutions. The DoJ did not name the company whose chips ALX Solutions was allegedly smuggling, but quoting a complaint, it said the chip is "the most powerful chip in the market" and is "designed specifically for AI applications." That description makes it likely that the chips being smuggled were made by Nvidia. A report by Reuters specifically named Nvidia's H100 GPUs as the chips being shipped. A review of export documents by the DOJ found that ALX Solutions sent chips and other tech to shipping and freight-forwarding companies in Singapore and Malaysia, but received payments from entities in Hong Kong and China in return. The department also found records of communication regarding shipping the tech to Malaysia to specifically go around U.S. export restrictions. "This case demonstrates that smuggling is a nonstarter," an Nvidia spokesperson said in a statement. "We primarily sell our products to well-known partners, including OEMs, who help us ensure that all sales comply with U.S. export control rules. Even relatively small exporters and shipments are subject to thorough review and scrutiny, and any diverted products would have no service, support, or updates." The news comes as the U.S. tries to figure out how to strike a balance between fostering global AI innovation and imposing export restrictions to China, which many in the West perceive to be a major threat in the AI race. The Trump administration's recently-announced AI Action Plan belabored the importance of having strong export restrictions, but was light on details. One potential solution to curb chip smuggling that has been suggested by the U.S. government in recent days is to implement tracking technology into chips to help catch smuggling, but chipmakers are quite opposed to such a move. In a blog post on Tuesday, Nvidia said its GPUs do not include kill switches or backdoors, and argued that building in such tools would only result in compromising security. "Nvidia has been designing processors for over 30 years. Embedding backdoors and kill switches into chips would be a gift to hackers and hostile actors," the company wrote. "It would undermine global digital infrastructure and fracture trust in U.S. technology. Established law wisely requires companies to fix vulnerabilities -- not create them." "That's not sound policy. It's an overreaction that would irreparably harm America's economic and national security interests," Nvidia wrote. Nvidia did not immediately return requests for additional comment.

Two Chinese nationals arrested in the U.S. over GPU smuggling worth 'tens of millions of dollars' -- over 20 shipments of AI chips and numerous illicit payments tracked

The U.S. Department of Justice has arrested two Chinese nationals on a federal criminal complaint that alleges they exported AI GPUs worth tens of millions of dollars to China in exchange for cash. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, face up to 20 years in prison if found guilty, according to the DoJ. As stated in the press release, the two alleged offenders have been charged with violating the Export Control Reform Act. From October 2022 to July 2025, it is alleged that they used a company, ALX Solutions Inc., to "knowingly and willfully" export sensitive technology, including GPUs, from the U.S. to China without a license or authorization. It is alleged that the company was setup shortly after the Commerce Department started requiring such licenses for the very same goods Yang and Geng are said to have exported, implying it was done so explicitly for illicit purposes. According to export records, a shipment in December 2024 and "at least 20 previous shipments" from the company "involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia," known transshipment points used to smuggle GPUs into China. The charges state that ALX Solutions never received payments from the entities they were allegedly selling the goods too, but rather received "numerous payments" from companies in Hong Kong and China, including one worth $1 million in January 2024. The December 2024 shipment was purportedly labeled, claiming it was sending GPUs subject to federal laws and regulations, when in reality it contained unlicensed GPUs. The release does not specify which chips the perps were allegedly moving between the U.S. and China. However, the chip (singular, implying only one variant), was made "by a manufacturer of high-performance AI chips" and is quoted as being "the 'most powerful GPU chip on the market,"' and is 'designed specifically for AI applications,'" including developing self-driving cars, medical diagnosis systems, and other AI powered applications. Therefore, it seems highly plausible that the chip in question is likely the Nvidia H100 or B200. Law enforcement have reportedly searched the offices of the offending shell company, seizing phones that include "incriminating communications" between defendants. After surrendering to authorities on August 2, Geng was released on a $250,000 bond. An August 12 detention hearing has been set for Yang, who remains in custody because they are in the U.S. illegally, having overstayed their visa. Arraignment is scheduled for September 11.

Chinese Nationals Arrested for Smuggling Nvidia RTX 4090, 5090 Units to China

Federal investigators have arrested two Chinese nationals accused of smuggling Nvidia's RTX 4090 and 5090 graphics cards and H100 AI GPUs into China, in violation of US export controls. The 28-year-old suspects, Chuan Geng and Shiwei Yang, allegedly carried out the smuggling scheme from their Los Angeles area company, ALX Solutions, the Justice Department says. The smuggling activities occurred from October 2022 to July 2025. The criminal complaint says the two suspects were found shipping Nvidia products, including PNY-branded RTX 4090 gaming graphics cards and the H100, to Malaysia in December 2024. The shipment "contained 117 Graphic Cards with a value of $176,500 and two Graphical Processing Unit Base Boards, with a value of $4,000," the complaint says. A federal investigator with the Commerce Department wrote that neither Geng nor Yang applied for a license to export the products to China. Instead, the shipment was labeled under a different export code, EAR99, which covers "low-technology consumer goods and [does] not require a license in most situations." The US has blocked shipments of RTX 4090 and other high-end Nvidia GPUs to China to prevent the Chinese government from securing advanced chips to bolster its AI ambitions. The 33-page criminal complaint adds that law enforcement searched ALX Solutions' office last week and seized Geng and Yang's phones, which allegedly reveal their scheme to ship "export-controlled chips to China through Malaysia to evade US export laws." In addition, an Excel file found in Yang's Google Drive account mentions shipments containing Gigabyte 4090, TUF 4090, and MSI 4090. "The other seven shipments list the items as '4090' and '5090,'" the complaint adds. The case offers a glimpse at the ongoing GPU smuggling trade. The Financial Times estimates that at least $1 billion in Nvidia AI chips were shipped to the country this year, despite the Trump administration's effort to prevent them. Geng and Yang allegedly secured the H100 GPUs from Super Micro, a US server provider. The criminal complaint says one invoice shows ALX Solutions paid $28 million for the GPUs, with Super Micro believing the shipment was headed to a company in Singapore. However, that company didn't exist, according to federal investigators. The suspects also sourced some GPUs from MiTAC Computing, another server provider. The criminal complaint adds that ALX Solutions received wire funds from various Hong Kong and Chinese companies, which were likely acting as intermediaries. Seized Google records also show instances of Chinese companies contacting ALX about buying Nvidia GPUs. The Justice Department announced the arrests as the Trump administration explores whether a location-tracking system should be installed on Nvidia's AI chips to prevent such smuggling to China. But on Tuesday, Nvidia pushed back on the idea and suggested that any location tracking would amount to installing a backdoor into the GPUs. In response to the arrests, Nvidia told PCMag: "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. Even relatively small exporters and shipments are subject to thorough review and scrutiny, and any diverted products would have no service, support, or updates."

US charges 2 with illegally shipping Nvidia AI to China

Feds claim suspects talked about rerouting kit through Malaysia Federal authorities in the US have charged two Chinese nationals with secretly exporting advanced AI chips to China. According to the feds, Chuan Geng and Shiwei Yang set up a company called ALX Solutions in October 2022, just after the Biden administration slapped heavy export controls on high-end GPUs in an attempt to stymie the Chinese AI industry. The California-based operation is alleged to have shipped the goods through last month, before its operators were nabbed over the weekend, per the Justice Department, which claimed the shipment contained the "most powerful GPU chip on the market." The feds claim they seized the phones belonging to Geng and Yang which they allege "revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade US export laws." The official statement doesn't name the export-license-demanding chips in question, but the BBC reports that they included Nvidia's H100 AI processor and GeForce RTX 4090 GPU (rather than the downrated 4090D), both of which came out in 2022. We have asked Nvidia to confirm. There have also recently been reports of Nvidia's newer B200 AI processor evading US export controls. Nvidia insists the new arrests demonstrate how people can't get away with smuggling its top-shelf products. But then again, it has every reason to insist the current system is working. The company's dominance of the AI market makes it a central player in the US and China's geopolitical struggles. That position recently got more uncomfortable, with Beijing quizzing it about potential backdoors in the H20 chips that the US allows it to export to China, and with Trump advisors floating the idea offorcing location-tracking capabilitiesinto Nvidia's wares. "Embedding backdoors and kill switches into chips would be a gift to hackers and hostile actors," Nvidia chief security officer David Reber Jr wrote in a Tuesday blog post that seemed designed to warn the US authorities as much as to placate those in China. "It would undermine global digital infrastructure and fracture trust in U.S. technology." ®

Two Chinese nationals in California accused of illegally shipping Nvidia AI chips to China

Aug 5 (Reuters) - Two Chinese nationals were arrested in California and charged with illegally shipping tens of millions of dollars' worth of AI chips to China, including Nvidia H100s, the U.S. Justice Department said Tuesday. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, exported the advanced Nvidia chips and other technology to China from October 2022 through July 2025 without obtaining the required licenses from the U.S. Commerce Department, a criminal complaint says. According to the complaint, Geng and Yang's El Monte-based company, ALX Solutions Inc, was founded in 2022, shortly after the U.S. imposed sweeping export controls on technology to China and began to require licenses for the chips. A spokesperson for Nvidia declined comment. Over 20 shipments from ALX solutions went to shipping and freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods to China. ALX received a $1 million payment from a China-based company in January 2024 and other payments from companies in Hong Kong and China, not the freight forwarding companies. Nvidia H100s are advanced chips that can be used to train large language models and for other applications, such as developing self-driving cars and medical diagnosis systems. Records show that from at least August 2023 to July 2024, ALX Solutions bought over 200 Nvidia H100 chips from San Jose, Calif-based server maker Super Micro Computer, declaring that the end users were in Singapore and Japan. Super Micro did not immediately respond to a request for comment. In addition to Nvidia's H100s, the pair are accused of illegally shipping Nvidia video graphics cards known as PNY GE Force RTX 4090, which also require a license for export to China. Geng and Yang appeared in U.S. District Court in Los Angeles late Monday, according to the Justice Department. Geng, a permanent resident, was released on $250,000 bond. Yang, who overstayed her visa, has a detention hearing on August 12. Reporting by Karen Freifeld; Editing by Alistair Bell Our Standards: The Thomson Reuters Trust Principles., opens new tab

Two Chinese nationals charged for illegally shipping Nvidia AI chips to China

China is one of Nvidia's largest markets, particularly for data centers, gaming and artificial intelligence applications. Two Chinese nationals in California have been arrested and charged with the illegal shipment of tens of millions of dollars' worth of AI chips, the Department of Justice said Tuesday. Chuan Geng, 28, and Shiwei Yang, 28, exported the sensitive chips and other technology to China from October 2022 through July 2025 without obtaining the required licenses, the DOJ said, citing an affidavit filed with the complaint. The illicit shipments included Nvidia's H100 general processing units, according to the affidavit seen by Reuters. The H100 is amongst the U.S. chipmaker's most cutting-edge chips used in artificial intelligence allocations. The Department of Commerce has placed such chips under export controls since 2022 as part of broader efforts by the U.S. to restrict China's access to the most advanced semiconductor technology. This case demonstrates that smuggling is a "nonstarter," Nvidia told CNBC. "We primarily sell our products to well-known partners, including OEMs, who help us ensure that all sales comply with U.S. export control rules." "Even relatively small exporters and shipments are subject to thorough review and scrutiny, and any diverted products would have no service, support, or updates," the chipmaker added. Geng and Yang's California-based company, ALX Solutions, had been founded shortly after the U.S. chip controls first came into place. According to the DOJ, law enforcement searched ALX Solutions' office and seized the phones belonging to Geng and Yang, which revealed incriminating communications between the defendants, including communications about evading U.S. export laws by shipping the export-controlled chips to China through Malaysia. The review also showed that in December 2024, ALX Solutions made over 20 shipments from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, which the DOJ said are commonly used as transshipment points to conceal illicit shipments to China. ALX Solutions did not appear to have been paid by entities they purportedly exported goods to, instead receiving numerous payments from companies based in Hong Kong and China. The U.S. Department of Commerce's Bureau of Industry and Security and the FBI are continuing to investigate the matter. The smuggling of advanced microchips has become a growing concern in Washington. According to a report from the Financial Times last month, at least $1 billion worth of Nvidia's chips entered China after Donald Trump tightened chip export controls earlier this year. In response to the report, Nvidia had said that data centers built with smuggled chips were a "losing proposition" and that it does not support unauthorized products.

Two California Men Charged With Illegally Exporting AI Chips to China

Two California men are facing federal charges for allegedly funneling high-performance AI chips to China in violation of U.S. export laws designed to protect sensitive technology, the U.S. Department of Justice said on Tuesday. Chuan Geng of Pasadena and Shiwei Yang of El Monte were charged Monday in Los Angeles with conspiring to violate the Export Control Reform Act. Prosecutors allege the pair used their company, ALX Solutions Inc., to illegally ship restricted graphics processing units -- known as GPUs -- to China through third-party shippers in Southeast Asia, masking the final destination. Federal agents took both men into custody on Saturday. Geng, a permanent U.S. resident, surrendered to federal agents. Yang, whom prosecutors say overstayed his visa and is in the country illegally, was arrested the same day. The charge carries a maximum penalty of 20 years in prison. According to the complaint, ALX Solutions, which operated out of El Monte, CA., was formed shortly after the U.S. Commerce Department began requiring licenses for certain advanced microchips headed to China. In January, ahead of the second Trump inauguration, the Biden Administration tightened restrictions on the export of artificial intelligence chips and related technologies. "To enhance U.S. national security and economic strength, it is essential that we do not offshore this critical technology and that the world's AI runs on American rails," the White House said at the time. From October 2022 through July of this year, the DOJ said the company allegedly sent more than 20 shipments to Southeast Asia that eventually made their way to China. "A review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by ALX Solutions involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, which commonly are used as transshipment points to conceal illegal shipments to China," the DOJ wrote. Following a court appearance on Monday, Geng was released on a $250,000 bond. Yang, however, remains in custody pending a detention hearing. Both men are scheduled to be arraigned Sept. 11 in federal court. Prosecutors say ALX never received payments from the listed recipients of the shipments. Instead, funds came from firms in Hong Kong and mainland China, including a $1 million wire transfer from a China-based company in early 2024. The Department of Justice did not immediately respond to Decrypt's request for comment. Due to their ability to process large amounts of data, GPUs are essential to artificial intelligence development. The U.S. has increasingly restricted GPU exports to China, citing national security concerns. Other countries restricted from GPU exports include Russia, Iran, and North Korea. In April, amid rising tariffs and tensions between the U.S. and China, chipmaker Nvidia said it is investing $500 billion in infrastructure development and moving parts of its AI supercomputer manufacturing operations to the United States.

Alleged three-person smuggling operation accused of shifting tens of millions of dollars' worth of AI chips to China potentially faces up to 20-year prison sentence

The defendants allegedly received $1 million payments from China-based companies. Two Chinese nationals have been arrested on the grounds of allegedly exporting AI chips out of the US to China without the licenses now legally required. The pair are specifically charged with violating the Export Control Reform Act, which could lead to a sentence of up to 20 years in prison. According to the US Department of Justice, Chuan Geng and Shiwei Yang are accused of exporting "tens of millions of dollars' worth of sensitive microchips used in artificial intelligence (AI) applications" between October 2022 and July 2025. Last week, Chuan Geng and Shiwei Yang's phones were seized, surfacing allegedly incriminating communications "about shipping export-controlled chips to China through Malaysia to evade U.S. export laws." The exports were said to be handled through the California-based company ALX Solutions Inc., a three-person outfit in which Geng is listed as handling the firm's finances, Yang holds the title of secretary, and the third alleged member of the operation, said to be the company's chief executive, has not yet been named. The company was apparently founded "shortly after the Commerce Department began requiring licenses for the advanced microchips that Yang and Geng are alleged to have illegally exported." ALX Solutions shipped this restricted hardware to Singapore and Malaysia, though the DOJ says these were merely pitstops on the journey, as both locations "are used as transshipment points to conceal illegal shipments to China." Furthermore, the DOJ says that ALX Solutions did not receive payment directly from the clients it claimed to be shipping the tech to, instead allegedly receiving payment from "companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024." Chip smuggling is nothing new -- over the years we've heard of smugglers sequestering hundreds of CPUs in prosthetic body parts and using live lobsters as an unlikely cover. Since the roll out of the previous Biden administration's AI Diffusion Rule roll out, and the Trump administration's following rescission and retooling of these export controls, smuggling operations appear to have become more sophisticated. For instance, chip smugglers allegedly sent $1 billion worth of Nvidia's AI chips to China in the three months following the implementation of the tightened Trump controls. In the case of ALX Solutions, the company allegedly sent "at least 20" shipments intended for clients in China prior to December 2024. The DOJ alleges that at least one shipment made at the end of 2024 was "falsely labelled", going on to elaborate, "In fact, the shipment contained GPUs that required a license for export to China. Neither the defendants nor their company applied for, nor did they obtain a license from the Commerce Department." As for Geng and Yang, neither have yet had the opportunity to enter a plea. A federal judge has since "ordered Geng released on $250,000 bond and scheduled an [August] 12 detention hearing for Yang," with arraignments to follow on September 11.

Two Chinese Nationals in California Accused of Illegally Shipping Nvidia AI Chips to China

(Reuters) -Two Chinese nationals were arrested in California and charged with illegally shipping tens of millions of dollars' worth of AI chips to China, including Nvidia H100s, the U.S. Justice Department said Tuesday. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, exported the advanced Nvidia chips and other technology to China from October 2022 through July 2025 without obtaining the required licenses from the U.S. Commerce Department, a criminal complaint says. According to the complaint, Geng and Yang's El Monte-based company, ALX Solutions Inc, was founded in 2022, shortly after the U.S. imposed sweeping export controls on technology to China and began to require licenses for the chips. A spokesperson for Nvidia declined comment. Over 20 shipments from ALX solutions went to shipping and freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods to China. ALX received a $1 million payment from a China-based company in January 2024 and other payments from companies in Hong Kong and China, not the freight forwarding companies. Nvidia H100s are advanced chips that can be used to train large language models and for other applications, such as developing self-driving cars and medical diagnosis systems. Records show that from at least August 2023 to July 2024, ALX Solutions bought over 200 Nvidia H100 chips from San Jose, Calif-based server maker Super Micro Computer, declaring that the end users were in Singapore and Japan. Super Micro did not immediately respond to a request for comment. In addition to Nvidia's H100s, the pair are accused of illegally shipping Nvidia video graphics cards known as PNY GE Force RTX 4090, which also require a license for export to China. Geng and Yang appeared in U.S. District Court in Los Angeles late Monday, according to the Justice Department. Geng, a permanent resident, was released on $250,000 bond. Yang, who overstayed her visa, has a detention hearing on August 12. (Reporting by Karen Freifeld; Editing by Alistair Bell)

Chinese nationals arrested for allegedly shipping AI chips to China

Two Chinese nationals were charged with illegally shipping to China tens of millions of dollars' worth of sensitive microchips used in artificial intelligence (AI) applications, the Justice Department announced Tuesday. Chuan Geng and Shiwei Yang are accused of "knowingly and willfully" exporting chips, including Nvidia H100s, to China without obtaining the required licensing from the Department of Commerce, from October 2022 to July 2025. Tha defendants' company, ALX Solutions Inc., was founded in 2022, shortly after the U.S. imposed sweeping export restrictions on the advanced computer chips to China, according to the DOJ, which cited an affidavit filed with the criminal complaint. On more than 20 occasions, according to the DOJ, the company sent restricted technology to freight-forwarding companies in Malaysia and Singapore, which then purportedly sent the shipments to China. The California-based company received payments from companies based in China and Hong Kong, according to the DOJ, but never from the Malaysian and Singaporean companies. The defendants are also accused of mislabeling a shipment as "subject to federal laws and regulations" in the hopes of avoiding inspection, but the chip actually required a license, according to the DOJ press release. That chip, the complainant says, is the "most powerful GPU chip on the market" and is "designed specifically for AI applications," like "to develop self-driving cars, medical diagnosis systems, and other AI-powered applications," the DOJ release said. The defendants were charged with violating the Export Control Reform Act, a felony that carries up to 20 years in federal prison. Yang, who lives illegally in the U.S. after overstaying her visa, was arrested on Saturday. Geng, a lawful permanent U.S. resident, surrendered to federal authorities later that day. They appeared late Monday before a magistrate judge, and Geng was released on $250,000 bond. The arraignment was set for Sept. 11. The DOJ said law enforcement searched their company's office last week and seized the defendants' phones, which "revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade U.S. export laws."

Nvidia AI chips smuggling: Two Chinese nationals arrested in California

Two Chinese nationals were arrested in California and charged with illegally shipping tens of millions of dollars' worth of AI chips to China, including C H100s, the U.S. Justice Department said Tuesday. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, exported the advanced Nvidia chips and other technology to China from October 2022 through July 2025 without obtaining the required licenses from the U.S. Commerce Department, a criminal complaint says. According to the complaint, Geng and Yang's El Monte-based company, ALX Solutions Inc, was founded in 2022, shortly after the U.S. imposed sweeping export controls on technology to China and began to require licenses for the chips. A spokesperson for Nvidia declined comment. Over 20 shipments from ALX solutions went to shipping and freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods to China. ALX received a $1 million payment from a China-based company in January 2024 and other payments from companies in Hong Kong and China, not the freight forwarding companies. Nvidia H100s are advanced chips that can be used to train large language models and for other applications, such as developing self-driving cars and medical diagnosis systems. Records show that from at least August 2023 to July 2024, ALX Solutions bought over 200 Nvidia H100 chips from San Jose, Calif-based server maker Super Micro Computer, declaring that the end users were in Singapore and Japan. Super Micro did not immediately respond to a request for comment. In addition to Nvidia's H100s, the pair are accused of illegally shipping Nvidia video graphics cards known as PNY GE Force RTX 4090, which also require a license for export to China. Geng and Yang appeared in U.S. District Court in Los Angeles late Monday, according to the Justice Department. Geng, a permanent resident, was released on $250,000 bond. Yang, who overstayed her visa, has a detention hearing on August 12. Q1. Which company manufactures H100s chips? A1. Nvidia manufactures H100s chips. Q2. Were Nvidia chips getting smuggled? A2. Over 20 shipments from ALX solutions went to shipping and freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods to China.

Nvidia AI Chips Worth $28 Million Illegally Shipped To China, Two Chinese Citizens Charged In California Smuggling Case - NVIDIA (NASDAQ:NVDA)

Two Chinese nationals in California have been charged with smuggling millions of dollars' worth of Nvidia Corporation NVDA AI chips to China in violation of U.S. export controls, the Department of Justice announced Tuesday. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get StartedDOJ Uncovers Major AI Chip Smuggling Operation Involving Nvidia Hardware According to the Justice Department, Chuan Geng and Shiwei Yang, both 28, were arrested and charged for exporting advanced AI chips, including Nvidia's H100 processors, to China without the required U.S. Commerce Department licenses, reported Reuters. The alleged scheme, which spanned from October 2022 to July 2025, involved more than 20 shipments valued at tens of millions of dollars. Geng, a permanent U.S. resident and Yang, who overstayed her visa, operated through their El Monte, California-based company, ALX Solutions. The company was founded shortly after the U.S. implemented export restrictions aimed at slowing China's military AI development. See Also: Elon Musk Confirms Tesla As the Mystery Big-Tech That Signed $16.5 Billion Chip Contract With Samsung: 'I Will The Line Personally' To Boost Progress Nvidia Chips Routed Through Southeast Asia To Evade Controls Authorities say ALX Solutions purchased over 200 Nvidia H100 chips from Super Micro Computer in San Jose, falsely claiming customers were located in Singapore and Japan, the report noted. One invoice listed a customer in Singapore with a declared value of $28.4 million, but U.S. officials in Singapore confirmed the entity did not exist at the listed address and that the shipment never arrived. Nvidia And Super Micro Respond Amid Rising Export Control Scrutiny A spokesperson for Nvidia said that "this case demonstrates that smuggling is a nonstarter," adding, "We primarily sell our products to well-known partners...who help us ensure that all sales comply with U.S. export control rules." Nvidia added that diverted products do not receive support, service or updates, the report added. Super Micro stated that it is "firmly committed to compliance with all U.S. export control regulations" and is cooperating with authorities. Legal Proceedings And Background Context Geng was released on a $250,000 bond, while Yang is scheduled for a detention hearing on Aug. 12. The case follows reports from earlier this year that estimated over $1 billion in Nvidia chips were smuggled to China via black-market networks. As per the report, within three months of President Donald Trump tightening export controls, the highly sought-after B200 chip -- used by major U.S. tech firms for AI -- was being shipped and sold on China's black market for American semiconductors. Meanwhile, last month, Nvidia applied for U.S. government licenses to resume shipments of its H20 AI chips to China and expects approval soon. At the time, White House adviser Kevin Hassett said the Trump administration's decision to allow exports aims to prevent China from gaining a technological edge in advanced semiconductors. Price Action: On Monday, Nvidia shares fell 0.97% during regular trading and dipped an additional 0.81% in after-hours, closing at $176.81, as per Benzinga Pro. According to Benzinga's Edge Stock Rankings, NVDA maintains strong momentum across short, medium and long-term periods. However, despite its robust growth, the stock's value score remains relatively low. More in-depth performance details can be found here. Read Next: Trump's New EU Trade Deal Labeled 'Bad News' By Economists As Dow Futures Spike Over 150 Points Photo by gguy via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$176.81-0.81%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.54Growth99.07QualityN/AValue6.41Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

U.S. Bust Snares Duo Behind Secret GPU Pipeline Feeding China's AI Factories

Federal agents in Los Angeles say they have cracked open a smuggling network that moved tens of millions of dollars' worth of cutting‑edge graphics processors to China despite strict export controls, arresting two twenty‑somethings who allegedly ran the scheme out of a drab strip‑mall office in El Monte. Court papers unsealed Tuesday describe how ALX Solutions Inc. sprang to life weeks after Washington tightened chip‑export rules in late 2022. Over the next twenty months the firm booked 21 outbound shipments, often routed through Singapore or Malaysia, declaring the cargo as commodity video cards exempt from licensing. A routine inspection blew the lid off: customs scanners picked up crates stuffed with the market's hottest accelerators, their boxes marked simply "computer parts." Bank transfers reveal a single Hong Kong buyer wiring $1 million upfront, while smaller deposits trickled in from mainland entities tied to defense contractors. Investigators also intercepted Signal chats where co‑founder Chuan Geng coached partner Shiwei Yang to "slice orders, never repeat a forwarder, switch labels if someone asks questions." The case leans on a Bureau of Industry and Security regulation issued in October 2022 that yanked China's access to chips able to crunch massive neural‑network workloads unless exporters first secure a Commerce license. BIS officials say the threshold -- roughly 600 gigabytes per second of interconnect bandwidth -- maps closely to hardware that can accelerate military AI. How the feds closed in The affidavit almost reads like a spy thriller: a mislabelled pallet caught by Long Beach customs last December, a serial‑number trace that pinged Nvidia's channel‑partner database, and a late‑night stakeout that tailed a delivery van from the port to ALX's rented warehouse. When agents executed a search warrant, they found empty anti‑static trays for roughly a thousand premium GPUs, with a street value $25 million plus packing slips headed for a fledgling artificial‑intelligence firm based in Shenzhen. Geng, a lawful U.S. resident, surrendered without incident. Yang, whose student visa expired in 2020, was picked up at LAX holding a one‑way ticket to Taipei. A magistrate released Geng on a $250 k bond; Yang remains in custody pending an August 12 detention hearing. Both face charges under the Export Control Reform Act, carrying penalties of up to 20 years behind bars. The Justice Department's Counterintelligence and Export Control Section is prosecuting alongside the U.S. Attorney's Office in Los Angeles. The FBI called the plot "classic transshipment with 21st‑century polish," while BIS said it will pursue civil penalties and possible lifetime export ban Public filings show Geng previously acted as finance chief for a short‑lived e‑commerce outfit dissolved over unpaid taxes; Yang co‑owned an LA parcel‑forwarding shop that catered to overseas sneaker flippers. Neither has a tech pedigree, bolstering prosecutors' claim that ALX existed solely to move embargoed silicon into China's hunger‑stricken accelerator market Prosecutors still need a grand jury to hand up an indictment, and defense counsel signaled an early tactic: they'll claim the chips sat just below Commerce's performance bar when purchased. Expect hefty expert testimony on bandwidth thresholds and firmware revisions. A trial could land as soon as spring 2026, offering the first forensic look at how Washington plans to police silicon smuggling in the AI era.

Chinese nationals living in US charged with smuggling millions worth...

Two Chinese nationals living in California - one illegally - were arrested for smuggling tens of millions of dollars worth of high-powered Nvidia AI chips to Beijing, the Justice Department said Tuesday. The pair allegedly shipped advanced graphic processing units, including Nvidia H100 GPUs and Nvidia 4090 GPUs, to China from October 2022 to July 2025 through their El Monte-based company, ALX Solutions, according to an affidavit filed with the complaint in US District Court in Los Angeles. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, were charged with violating the Export Control Reform Act, a felony that carries a maximum of 20 years in federal prison. Yang, an illegal alien who overstayed her visa, was arrested on Saturday and Geng, a lawful permanent resident, surrendered to federal authorities later that day. The smuggled chips were the "most powerful GPU chip on the market," and "designed specifically for AI applications," such as "to develop self-driving cars, medical diagnosis systems, and other AI-powered applications," according to the complaint. The arrests come months after the Trump administration imposed sweeping export curbs in May in an attempt to crack down on China's ability get its hands on advanced chips to throttle Beijing in the AI race. Nonetheless, a bombshell report late last month revealed at least $1 billion worth of Nvidia chips were smuggled into China in the three months following Trump's ban. 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. ALX Solutions was founded shortly after the Commerce Department began requiring licenses for advanced microchips in 2018 during Trump's first term in office -- including the ones that Yang and Geng are accused of shipping overseas, according to court documents. The company allegedly used a common tactic to skirt export restrictions by shippiing the illicit wares to China through other countries. ALX Solutions routed at least at least 20 shipments, including one last December, from the US by using freight-forwarding companies in Singapore and Malaysia, according to the DOJ. The California firm never received payments from the those in Singapore and Malaysia, but it did receive money from companies in Hong Kong and China - including a $1 million payment in January 2024, the complaint alleged. The defendants' phones - which law enforcement seized last week after raiding their office - also revealed incriminating conversations about routing chips through Malaysia to evade US laws, the complaint alleged. Geng was released by a federal judge late Monday on $250,000 bond. Yang remains behind bars to await a detention hearing on Aug. 12. Their arraignment is slated for Sept. 11. The Justice Department declined to provide further comment. Lawyers for the Chinese nationals were not immediately known. The Post reached out to ALX solutions for comment.