US residents of Chinese origin accused of transporting millions of dollars' worth of Nvidia's advanced AI processors to Beijing illicitly
Two Chinese nationals, Chuan Geng and Shiwei Yang, were arrested in California for allegedly smuggling Nvidia AI chips to Beijing, bypassing U.S. export restrictions.
Geng, a lawful permanent resident, and Yang, an illegal alien who overstayed her visa, are accused of using their company, ALX Solutions, based in El Monte, to ship the highly sought-after Nvidia chips through freight-forwarding companies in Singapore and Malaysia.
The smuggled chips include Nvidia H100 GPUs and Nvidia 4090 GPUs, the most powerful GPU chips on the market designed for AI applications. These chips are intended for AI applications such as self-driving cars, medical diagnosis systems, and other AI-powered applications.
At least 20 shipments, including one in December 2022, were routed through these countries, according to the complaint. The defendants' phones, seized after the office raid, contained incriminating conversations about routing chips through Malaysia to evade U.S. laws, as alleged in the complaint.
The pair allegedly shipped these chips from October 2022 to July 2025. They face violations of the Export Control Reform Act, a felony that carries a maximum of 20 years in federal prison.
ALX Solutions was founded after the Commerce Department began requiring licenses for advanced microchips in 2018. Despite these export controls, Chinese suppliers were still selling the smuggled chips to data center operators after the controls took hold.
The arrests come months after the Trump administration imposed sweeping export curbs in an attempt to crack down on China's ability to get advanced chips for the AI race. The Justice Department declined to provide further comment, and The Post reached out to ALX Solutions for comment, but no response was provided.
The case of ALX Solutions highlights the ongoing debate over the strategic balance between restricting Chinese AI capabilities and maintaining U.S. semiconductor market access. While U.S. export controls have constrained the official sale and have prompted Nvidia to redesign chips to meet compliance, significant smuggling of high-powered chips still occurs.
Efforts to enhance enforcement include proposals for embedding location tracking technology within AI chips to deter smuggling by making unauthorized chip movement traceable. However, this raises privacy and surveillance concerns which could deter legitimate purchasers as well.
Politically, these control measures have been subject to reversal and adjustment following high-level lobbying. For instance, Nvidia CEO Jensen Huang’s meetings with former President Trump led to the resumption of H20 chip exports to China under licenses issued by the U.S. Commerce Department. This dynamic indicates that export controls face both enforcement challenges and geopolitical negotiation pressures.
The arraignment for Geng and Yang is scheduled for Sept. 11. Lawyers for the Chinese nationals were not immediately known. A recent report revealed at least $1 billion worth of Nvidia chips were smuggled into China in the three months following a ban imposed by the Trump administration in May, suggesting significant smuggling activity.
Finance-related conversations were discovered on the defendants' phones, as incriminating conversations about routing chips through Malaysia to evade U.S. laws were found.The smuggled Nvidia chips, including the powerful Nvidia H100 GPUs and Nvidia 4090 GPUs, are designed for AI applications such as technology sectors like self-driving cars and medical diagnosis systems, raising questions about the role of technology in financial transactions.
