Prosecutors allege two individuals deliberately utilized a California enterprise to bypass export regulations for AI semiconductor technology.
In a recent enforcement action, U.S. authorities have accused two Chinese nationals of illegally exporting advanced Nvidia semiconductor chips valued at tens of millions to China, violating strict export regulations.
Chuan Geng and Shiwei Yang, both aged 28, are charged with “knowingly and willfully” exporting graphic processing units (GPUs) instrumental for artificial intelligence, without the necessary governmental permissions, spanning from October 2022 through July 2025, according to the U.S. Department of Justice.
Documentation reveals that the duo orchestrated a minimum of 21 shipments through their company, ALX Solutions Inc., based in El Monte, California, directed towards entities in Singapore and Malaysia. Notably, one shipment in December 2024, consisting of Nvidia H100 GPUs—considered the most powerful chip available—was falsely labeled and shipped without the required license from the Department of Commerce.
Prosecutors state that ALX Solutions received substantial payments from businesses in Hong Kong and mainland China, including a $1 million transaction from a Chinese firm in January 2024, bypassing the companies that accepted the shipments.
A recent search of ALX Solutions’s premises and the personal devices of Geng and Yang reportedly unveiled “incriminating communications,” indicating discussions about routing chips to China via Malaysia in an effort to evade U.S. export laws.
If convicted under the Export Control Reform Act, both Geng and Yang could face up to 20 years in prison.
Attempts to reach legal representatives for Geng and Yang for comments were unsuccessful.
Nvidia, headquartered in Santa Clara, California, remarked that this case underscores that smuggling is not a viable option. “We primarily engage with reputable partners, including original equipment manufacturers (OEMs), to ensure compliance with U.S. export regulations for all sales,” a company spokesperson stated. “Even minor exporters are subject to stringent oversight, and any diverted products will not receive services, support, or updates.”
The U.S. government has prohibited the export of cutting-edge chips to China amid escalating competitive tensions between Washington and Beijing. Officials assert these restrictions, largely instituted during the Biden administration, are necessary for protecting national security.
In response, China has imposed its own export limitations targeting the U.S., claiming that Washington is undermining global trade and exploiting its technological dominance.
Last month, Nvidia CEO Jensen Huang announced an agreement to lift the ban on the H20 GPU, which is tailored for the Chinese market and less powerful than the H100, following discussions with President Donald Trump. Huang remarked that this reversal would encourage “nations worldwide to choose America.”