By Jeffrey A. Newman Esq.
The US government has banned the export of the most advanced chips to China amid Us national security concerns that the most powerful chips will be used to advance China’s military capabilities.
On Tuesday August 5 of this year, two Chinese nationals, one an illegal alien, were arrested on a fesderal criminal complaint alleged that they knowingly exported to China tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence applications. Shipments falsely labeled as compliant with U.S. laws, sent under Geng’s supervision, included advanced Nvidia GPUs that required export licenses for China. There is no indication that Nvidia had any involvement or knowledge of the illicit sales of its chips to China.
Neither Geng nor ALX Solutions applied for or secured the necessary licensesThis was done through their company ALX Solutions. Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, are charged with violating the Export Control Reform Act, a felony that carries a statutory maximum sentence of 20 years in federal prison. Geng surrendered to federal authorities on Saturday. Yang was arrested earlier that day. According to a government release, Geng is a lawful permanent resident. Yang is an illegal alien who overstayed her visa.
Geng was described as having direct financial and decision-making authority within ALX Solutions, the company responsible for organizing and coordinating shipments of AI chips that ultimately were routed to China through transshipment points in Singapore and Malaysia.
A review of export records, business records, and company websites indicates that a December 2024 shipment and at least 20 previous shipments by ALX Solutions involved exports from the U.S. to shipping and freight-forwarding companies in Singapore and Malaysia, which commonly are used as transshipment points to conceal illegal shipments to China.
ALX Solutions has not received payments from the entities to which they purportedly exported goods. Instead, ALX Solutions received numerous payments from companies based in Hong Kong and China, including a $1 million payment from a China-based company in January 2024. According to the complaint and public information, the chip – made by a manufacturer of high-performance AI chips – is the “most powerful GPU chip on the market,” and is “designed specifically for AI applications,” such as “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications.” The DOJ and Bureau of Industry and Security (BIS) are investigating the end-user companies in China and Hong Kong that sent payments to ALX; the identities of specific companies are not yet disclosed in public records.
The specific Nvidia chips shipped illegally to China were the Nvidia H100 AI accelerators, regarded as the most powerful GPU chips for artificial intelligence and data center applications. The records indicate that the shipments occurred in at least 21 instances over multiple months, most notably including a shipment of Nvidia H100 chips in December 2024.
Nvidia chips restricted by export controls have been sold to third-party entities who then resold or diverted them to China, especially through server manufacturers and obscure resellers, resulting in significant black market activity since late 2022. Chinese universities and research institutes acquired prohibited Nvidia chips — including H100, A100, B200, and H200 — embedded in server products made by companies such as Super Micro, Dell Technologies, and Taiwan’s Gigabyte. The servers containing these restricted chips were shipped to China by less-prominent Chinese retailers, bypassing direct Nvidia sales. Reports estimate over $1 billion worth of Nvidia chips were smuggled into China in the three months following Trump’s 2025 export ban, with chip diversion particularly rampant in the spring and summer of 2024.
According to the New York Post, At least $1 billion in Nvidia computer chips have been smuggled into China in the three-months span after President Trump imposed export controls on the cutting-edge chips, according to a bombshell report Thursday.
Nvidia’s B200 chip usedGoogle to power its artificial intelligence models – are banned for sale to China due to government rules limiting shipments for chips that exceed certain performance thresholds. The POst says that this chip was still being sold in May by Chinese suppliers to data center operators that support China-based tech firms Its source was the Financial times citing an analysis of sales contracts, company filings and interviews with sources with direct knowledge of the deals. The Financial Times said it reviewed evidence that Chinese distributors in the Guangdong, Zhejiang and Anhui provinces had sold Nvidia’s B200 and other restricted chips such as the H100 and H200. The FT said there was no evidence that Nvidia had any involvement or knowledge of illicit chip sales to Chinese entities.
Jeffrey Newman Law is a whistleblower law firm representing whistleblowers reporting export tariff controls, tariff evasion and other kinds of WB cases. The firm website is www.JeffNewmanLaw.com . Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
