Prosecutors say the two men will “deliberately and intentionally” use the California-based company to circumvent export controls for AI chips.
US authorities accused two Chinese citizens of shipping advanced NVIDIA chips worth tens of millions of dollars to China for export control violations.
Chuan Geng and Shiwei Yang are allegedly “deliberately and intentionally” exported graphics processing units (GPUs) used to enhance artificial intelligence without approval from October 2022 to July 2025, the U.S. Department of Justice said Tuesday.
Export records show that 28-year-old Geng and Yang organized at least 21 shipments to Singapore and Malaysian businesses through Alx Solutions Inc, based in El Monte, California.
The export included the December 2024 NVIDIA H100 GPU shipment. This is called the most powerful chip on the market. This was “incorrectly labelled” and had not obtained the required license from the US Department of Commerce.
According to prosecutors, ALX Solutions received payments from companies in Hong Kong and China. This includes a total of $1 million from a China-based company in January 2024, not a company that accepted the shipment.
Prosecutors said last week the search for ALX Solutions offices and Geng and Yang mobile phones revealed “guilty communications,” including communications regarding the shipment of chips to China through Malaysia to avoid US export restrictions.
Geng and Yang face the biggest penalty in a 20-year prison if convicted under the Export Control Reform Act.
Al Jazeera was unable to immediately find the defendant’s lawyer because of the comments.
Santa Clara, California-based Nvidia said the incident showed “smuggling is a non-starter.”
“We mainly sell our products to well-known partners, including OEMS (original equipment manufacturers), which helps to ensure that all sales comply with US export control regulations,” a company spokesperson said.
“Even relatively small exporters and freight are subject to thorough review and scrutiny, and repurposed products do not have service, support or updates.”
The US government has banned exports of the most sophisticated chips to China amid a fierce battle for technical advantages between Washington and Beijing.
US officials argue that the restrictions introduced under former US President Joe Biden are necessary to protect national security.
China fought back with its own export controls against the US, but accused Washington of undermining global trade and abuses its control over technology.
Last month, Nvidia CEO Jensen Huang announced that Washington agreed to reverse the ban on selling the H20 GPU to China following discussions with US President Donald Trump.
Huang said lifting the export ban on the H20, which is specifically designed for the Chinese market and is less powerful than the H100, would encourage AI models to “choose America all over the world” and “choose America.”
