Two Chinese nationals living in California – one illegally – were arrested for smuggling tens of millions of dollars worth of high-powered Nvidia AI chips to Beijing, the Justice Department said Tuesday.
The pair allegedly shipped advanced graphic processing units, including Nvidia H100 GPUs and Nvidia 4090 GPUs, to China from October 2022 to July 2025 through their El Monte-based company, ALX Solutions, according to an affidavit filed with the complaint in US District Court in Los Angeles.
Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, were charged with violating the Export Control Reform Act, a felony that carries a maximum of 20 years in federal prison.
Yang, an illegal alien who overstayed her visa, was arrested on Saturday and Geng, a lawful permanent resident, surrendered to federal authorities later that day.
The smuggled chips were the “most powerful GPU chip on the market,” and “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications,” according to the complaint.
“This case demonstrates that smuggling is a nonstarter. We primarily sell our products to well-known partners, including OEMs [original equipment manufacturers], who help us ensure that all sales comply with US export control rules,” an Nvidia spokesperson told The Post.
“Even relatively small exporters and shipments are subject to thorough review and scrutiny, and any diverted products would have no service, support, or updates.”
The arrests come months after the Trump administration imposed sweeping export curbs in May in an attempt to crack down on China’s ability get its hands on advanced chips to throttle Beijing in the AI race.
Nonetheless, a bombshell report late last month revealed at least $1 billion worth of Nvidia chips were smuggled into China in the three months following Trump’s ban.
The powerful chips were still being sold by Chinese suppliers to data center operators – even after the controls took hold, according to a Financial Times analysis of sales contracts, company filings and interviews with sources with direct knowledge of the deals.
ALX Solutions was founded shortly after the Commerce Department began requiring licenses for advanced microchips in 2018 during Trump’s first term in office — including the ones that Yang and Geng are accused of shipping overseas, according to court documents.
The company allegedly used a common tactic to skirt export restrictions by shippiing the illicit wares to China through other countries.
ALX Solutions routed at least at least 20 shipments, including one last December, from the US by using freight-forwarding companies in Singapore and Malaysia, according to the DOJ.
The California firm never received payments from the those in Singapore and Malaysia, but it did receive money from companies in Hong Kong and China – including a $1 million payment in January 2024, the complaint alleged.
The defendants’ phones – which law enforcement seized last week after raiding their office – also revealed incriminating conversations about routing chips through Malaysia to evade US laws, the complaint alleged.
Geng was released by a federal judge late Monday on $250,000 bond. Yang remains behind bars to await a detention hearing on Aug. 12. Their arraignment is slated for Sept. 11.
The Justice Department declined to provide further comment.
Lawyers for the Chinese nationals were not immediately known. The Post reached out to ALX solutions for comment.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
