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.

Follow Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.