Catenaa, Wednesday, August 06, 2025- The US has arrested two Chinese nationals this week on charges that they sent tens of millions of dollars’ worth of advanced AI chips made by Nvidia to China, violating US export restrictions.
The Justice Department said in a statement Tuesday that the defendants used a company based in El Monte, California, to export sensitive technology, including graphics processing units used in artificial intelligence, without obtaining the necessary government licenses.
According to a criminal complaint provided by the agency, the two individuals shipped Nvidia-designed chips, including the company’s H100 AI accelerators, which are the basis for computers used to create and run artificial intelligence software. Such chips require official approval for sales to certain countries.
“This case demonstrates that smuggling is a nonstarter,” Nvidia said in a statement. The company said it primarily sells its products to well-known partners “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,” Nvidia said.
Up until being superseded earlier this year by a new line of products from Santa Clara, California-based Nvidia, the H100S were considered the most capable such processors.
Their export to China and other countries the US has deemed a threat to national security, requires licenses from the Commerce Department that are not usually given.
In the complaint, authorities called the H100 “the most powerful GPU chip on the market” and claimed the defendants sought to evade US export restrictions on it by shipping through third countries.
The Justice Department said the two Chinese nationals operated a company called ALX Solutions Inc. that was founded in 2022 shortly after the US Commerce Department began requiring licenses to sell such chips to overseas buyers.
Export records and other business documents indicate that the company sent at least 20 shipments to shipping and freight-forwarding companies in Singapore and Malaysia but never received payments from those entities, the Justice Department said.
ALX Solutions instead received “numerous payments” from companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024, the DOJ said.
