Two Chinese Nationals Arrested for Smuggling Nvidia AI Chips to China
The U.S. Department of Justice arrested Chuan Geng and Shiwei Yang on August 2 in California. They allegedly shipped tens of millions of dollars worth of high-performance AI chips to China through their company ALX Solutions.
The pair face charges for violating the Export Control Reform Act, carrying up to 20 years in prison. 
ALX Solutions reportedly sent “the most powerful chip in the market,” designed specifically for AI, to Singapore and Malaysia before routing shipments to China. The DOJ and Reuters identify these chips as Nvidia’s H100 GPUs.
Payments came from entities in Hong Kong and China. DOJ documents show efforts to use Malaysia as a way around U.S. export restrictions.
Nvidia responded:
“This case demonstrates that smuggling is a nonstarter.”
“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 U.S. government is exploring chip tracking technology to combat smuggling. Nvidia strongly opposes this move. In a recent blog post, the company warned that embedding kill switches or backdoors would create security risks.
Nvidia wrote:
“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.”
“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 has not provided further comment.
The arrests highlight the ongoing challenges in enforcing U.S. export controls amid fierce AI competition with China.
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