The U.S. Department of Justice (DOJ) announced on Monday that two Chinese men are in custody, accused of orchestrating an elaborate scheme to smuggle advanced Nvidia AI chips into China.
The chips in question, H100 and H200 — among Nvidia’s most powerful GPUs — are subject to strict export controls.
Prosecutors say the two men -- Fanyue Gong and Benlin Yuan -- conspired with a Hong Kong logistics firm and a China-based AI company to conceal the true destination of the chips. They allegedly used straw purchasers, submitted false paperwork, and routed shipments through intermediary countries before relabeling the chips under a fake company name to hide their origin.
According to U.S. authorities, the operation began as early as November 2023, and involved shipments worth at least US $160 million over time — making it one of the largest illicit exports of US-controlled AI hardware in recent years.
The arrests come at a politically sensitive moment: just days ago, U.S. President Donald Trump approved renewed exports of Nvidia’s H200 chips to China under a new, less restrictive export policy.
The DOJ called the case part of Operation Gatekeeper — a broad federal initiative targeting illegal trafficking of AI technology. Officials warned that advanced chips such as the H100 and H200 are “building blocks of AI superiority,” critical both to commercial AI development and potential military applications.
In reaction, Nvidia said it remains committed to enforcing its policies against unauthorized resale, noting that products diverted through illicit channels do not receive company support or updates.
Critics of the Trump administration’s export-relaxation have seized on the DOJ’s announcement, saying the arrests highlight the national-security risks of allowing sensitive AI hardware to flow back to China. Some lawmakers and analysts argue the crackdown underlines systemic vulnerabilities in export-control enforcement — even as high-level policy changes attempt to loosen restrictions.
The case is ongoing, and prosecutors say more charges may follow as investigators continue to dig into the network.
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