Chinese nationals arrested for allegedly shipping AI chips to China

Two Chinese nationals were charged with illegally shipping to China tens of millions of dollars’ worth of sensitive microchips used in artificial intelligence (AI) applications, the Department of Justice (DOJ) announced Tuesday.

Chuan Geng and Shiwei Yang are accused of “knowingly and willfully” exporting chips, including Nvidia H100s, to China without obtaining the required licensing from the Department of Commerce, from October 2022 to July 2025.

The defendants’ company, ALX Solutions Inc., was founded in 2022, shortly after the U.S. imposed sweeping export restrictions on the advanced computer chips to China, according to the DOJ, which cited an affidavit filed with the criminal complaint.

On more than 20 occasions, according to the DOJ, the company sent restricted technology to freight-forwarding companies in Malaysia and Singapore, which then purportedly sent the shipments to China.

The California-based company received payments from companies based in China and Hong Kong, according to the DOJ, but never from the Malaysian and Singaporean companies.

The defendants are also accused of mislabeling a shipment as “subject to federal laws and regulations” in the hopes of avoiding inspection, but the chip actually required a license, according to the DOJ press release.

That chip, the complainant says, is the “most powerful GPU chip on the market” and is “designed specifically for AI applications,” such as those used “to develop self-driving cars, medical diagnosis systems, and other AI-powered applications,” the DOJ release said.

The defendants were charged with violating the Export Control Reform Act, a felony that carries up to 20 years in federal prison.

Yang, who lives illegally in the U.S. after overstaying her visa, was arrested on Saturday. Geng, a lawful permanent U.S. resident, surrendered to federal authorities later that day.

They appeared late Monday before a magistrate judge, and Geng was released on a $250,000 bond. The arraignment was set for Sept. 11.

The DOJ said law enforcement searched their company’s office last week and seized the defendants’ phones, which “revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade U.S. export laws.”