With the US DOJ targeting two Chinese nationals, here's everything you need to know about the unauthorized export of AI chips to China

Time of India

a day ago

(Image via the United States Department of Justice)
The United States Department of Justice (DOJ) has arrested two Chinese nationals for alleged smuggling of advanced American artificial intelligence technology to China. The two individuals now face serious charges for their millions of dollars' worth of unauthorized exports AI chips.
This case came to highlight, at a time when there have been increased efforts made by the US government to enforce stricter export controls on cutting-edge semiconductor tech, which is critical for the development of AI.
Here is all you need to know about the case and the accused.
Who are the accused and why are they being targeted?
As per reports, there are two accused in this case—Chaun Geng, 28 and Shiwei Yang, 28. Coming from Pasadena and El Monte, respectively, these Chinese nationals got arrested this week.
As alleged by the Department of Justice, the accused operated a California-based company named ALX Solutions, which was founded shortly after strict US export controls over advanced chips were implemented in 2022.
In over three years, the accused, between October 2022 and July 2025, illegally exported tens of millions of dollars' worth of sensitive technology. The exports that required Commerce Department licenses included powerful Nvidia H100 AI chips smuggling.
Additionally, in December 2024, the company even sent GeForce RTX 4090 GPUs, which, as per the court documents, were checked by the US customs.
The authorities have also revealed that law enforcement seized the accused's phones during ALX Solutions' office search. They uncovered communications that discussed evasion tactics, including routing the shipments through Malaysia and Singapore.
While Geng, who handled the finances, has been identified as the permanent resident, Yang, who was the secretary of the firm, has been reported to have allegedly overstayed her visa.
The third employee, who is the Chief Executive, has not been named in the available documents, as per reports.
All the convicted now face felony charges under the Export Control Reform Act. If the accused is convicted, they could both receive 20 years of federal prison. As of now, Geng has been released on bond of $250,000, while Yang has been awaiting the detention hearing, which has been scheduled for August 12, 2025.
Chinese nationals' unauthorized export operation
The alleged scheme included routing the shipments via intermediary countries to hide the final destination—China. As per the DOJ's ALX Solutions allegations, they shipped over 20 shipments to the freight forwarding companies in Malaysia and Singapore, the nations that are known as the common transit points, for the illicit technology shipments China. Quite crucially, ALX did not receive payment even once from the intermediary firms.
The payments received by ALX originated from companies based in Mainland China and Hong Kong. It included the notable $1 million payment, which was received in January 2024.
The court documents have even detailed the specific invoice of approximately. $28.4 million, where it was claimed by ALX that a customer in Singapore ordered Nvidia H100 chips. These purchases were made from Super Micro Computer, a supplier. However, as per the US officials, there's no evidence that the chips arrived in Singapore.
They even said that the named customer company did not exist at the listed address, adding further upon Chinese nationals smuggling charges.
Why are the AI chip exports being called illegal?
The United States has stricter control over advanced AI chips. This is especially true for the Nvidia H100 because of the potential AI and military applications. Since 2022, the licences to make shipments to China have been made mandatory, but ALX Solutions, as alleged, has bypassed the rules, falsely declaring Singapore-based end-users.
The investigators, though, as per reports, have found no evidence of the chips reaching claimed destinations.
It's been emphasized by Nvidia that the diverted chips will receive no updates, service or support, calling smuggling a nonstarter or a losing proposition. The company emphasized that smuggling such products undermines the compliance frameworks they have with their legitimate partners. As for Super Micro, it has stated its commitment to AI chip export compliance. Further comments were declined in the ongoing case of artificial intelligence technology export.
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