Chinese Nationals in California Charged With Smuggling Nvidia AI Chips to China via Singapore and Malaysia

US Cracks Down On Illegal AI Chip Exports As California Duo Accused Of Smuggling Nvidia GPUs To China

Two Chinese nationals based in California have been charged with illegally exporting high-performance AI chips, valued in the tens of millions of dollars, from the United States to China.

The shipments breached export controls designed to restrict sensitive technology from reaching adversarial nations.

Backdoor Channels Through Southeast Asia Raise Red Flags

Federal prosecutors allege that Chuan Geng and Shiwei Yang used their company, ALX Solutions, to secretly ship restricted chips to China.

They are accused of routing the shipments through freight companies in Singapore and Malaysia to conceal the activity.

These nations are frequently used as diversion points to disguise China-bound goods, the Department of Justice (DOJ) said.

Between October 2022 and July 2025, investigators say the company made over 20 shipments without the required licenses.

Many of these shipments contained restricted Nvidia H100 chips and other high-performance GPUs that are essential for AI development.

Export Laws Flouted As Funds Flow In From China

Despite claiming to export goods to recipients in Southeast Asia, ALX Solutions never received payment from the listed recipients.

Instead, funds came from entities based in Hong Kong and mainland China, including a $1 million transfer in early 2024, according to court documents.

One invoice alone, submitted to Super Micro Computer in 2023, detailed an order worth more than $28.4 million for a Singapore-based customer.

But a US official later confirmed the recipient company did not exist at the stated address and the chips likely ended up elsewhere.

Secret Chats Reveal Plan To Evade US Controls

ALX Solutions was co-founded by Chuan Geng, Shiwei Yang, and a third unnamed Chinese national.

Geng managed the company’s finances, Yang served as secretary, and the three collectively exercised "full decision-making and freight coordination authority" over the business.

Phones seized during a search of the ALX office revealed incriminating discussions between Geng and Yang on how to circumvent U.S. regulations.

The DOJ stated that the pair were coordinating shipments in a deliberate effort to evade controls put in place by the U.S. Department of Commerce.

The department had tightened AI chip exports to China starting in 2022, around the same time the company was established.

The court fillings read,

"Neither ALX Solutions nor Geng or Yang applied for or obtained a license from the Commerce Department."

Nvidia Responds As Authorities Step In

The DOJ confirmed that the seized shipments included Nvidia’s H100 GPUs, which are considered among the most powerful AI chips available.

The H100 has been subject to strict export controls since 2022 to limit China’s access to AI hardware.

Nvidia told CNBC,

“This case shows that smuggling is a nonstarter. We primarily sell our products to well-known partners, including OEMs, who help us ensure that all sales comply with U.S. export control rules.”

Defendants Face Lengthy Prison Terms If Convicted

The two defendants, both aged 28, were arrested on 3 August.

Chuan Geng, from Pasadena, voluntarily surrendered to authorities, while Shiwei Yang, from El Monte, who had overstayed her U.S. visa, was taken into custody that same day.

Prosecutors confirmed both face charges under the Export Control Reform Act, which carries a maximum sentence of 20 years in federal prison.

Geng has since been released on a $250,000 bond.

Yang remains in custody, with both scheduled to be arraigned on 11 September in federal court.

Can The AI Boom Survive Without Control?

While global appetite for AI hardware surges, Coinlive believes the lack of robust compliance mechanisms among small exporters opens the door to backchannel flows that may undermine national security efforts.

If even low-volume operators can funnel restricted chips out of the U.S. undetected, what does that signal for the future of AI governance?

The rise of companies like ALX Solutions, formed just as chip restrictions took effect, shows how quickly opportunistic actors can exploit regulatory blind spots.

Without stronger oversight on freight intermediaries and end-user verification, the same chips meant to empower U.S. innovation may end up accelerating foreign adversaries’ AI development.