Two Arrested in the US for Illegally Exporting Microchips Used in AI Applications to China

• What happened: American authorities detained two Chinese nationals in the U.S. for allegedly exporting tech without a license or authorization.
• What was exported: They shipped Nvidia GPUs, including H100s and RTX 4090s, used in AI applications such as autonomous vehicles and advanced medical diagnostics.
• Why it matters: The accusations highlight a severe breach of export control regulations and its implications for national security.

Two Chinese nationals were arrested on a federal criminal complaint, accused of knowingly exporting microchips to China valued at tens of millions of dollars and routing shipments through intermediary countries without obtaining or even applying for a license. 

Chuan Geng and Shiwei Yang, both 28, are accused of unlawfully shipping sensitive AI chip technology, as the Department of Justice said the defendants and their company did not apply for or obtain a license from the Commerce Department.  

Details of the Operation  

The suspects operated through their California-based company, ALX Solutions Inc., to export sensitive technology, including Nvidia GPUs like H100s and RTX 4090s, which are critical to modern (AI) applications, such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.”

Between October 2022 and July 2025, they allegedly circumvented U.S. licensing requirements by routing these shipments through intermediaries in Singapore and Malaysia, concealing their ultimate destination in China to evade U.S. export laws. 

During a recent raid, incriminating communications regarding these export schemes were recovered from the defendants' seized devices.  

Federal investigations revealed that payments for these shipments were made by companies in Hong Kong and mainland China, with one $1 million transaction traced back to January 2024. 

Legal and Security Implications  

Geng surrendered to federal authorities on Saturday, and Yang was arrested earlier that day. The individuals face charges under the Export Control Reform Act, carrying a maximum penalty of 20 years in prison. Yet, a federal magistrate judge ordered Geng released on $250,000 bond. A detention hearing for Yang is scheduled for August 12.

This breach raises significant national security risks, as the allegedly exported GPUs represent some of the “most powerful AI chips on the market,” vital for high-stakes technological advancements.   

In other recent news, a Chinese state-sponsored hacker was arrested for the HAFNIUM intrusion campaign.