Two Men Charged in U.S. Over Alleged Smuggling of Nvidia AI Chips to China

U.S. authorities have arrested two Chinese men for allegedly smuggling Nvidia’s advanced H100 and H200 chips to China in violation of export controls, the Justice Department announced on Monday. The arrests came on the same day President Donald Trump authorized limited exports of Nvidia’s H200 chips to Beijing. Prosecutors said Fanyue Gong, 43, of New York, and Benlin Yuan, 58, a Canadian citizen originally from China, worked with associates at a Hong Kong logistics company and a China-based AI firm to evade U.S. restrictions.

According to court documents, the suspects used straw purchasers and intermediaries to acquire the chips and falsely claimed they were intended for U.S. customers or third countries such as Taiwan and Thailand. The goods were routed through U.S. warehouses, where Nvidia labels were removed and replaced with labels from what prosecutors believe was a fake company. Yuan allegedly instructed inspectors to hide the chips’ true destination and helped craft a cover story after federal authorities seized shipments.

The Justice Department said the smuggling network had been active since at least November 2023 and connected the scheme to a previously charged participant, Alan Hao Hsu, who pleaded guilty in October. Hsu and his company reportedly moved more than $50 million in Chinese funds to support operations that exported or attempted to export at least $160 million worth of restricted Nvidia chips. Officials described the operation as a threat to national security, while Nvidia reiterated its commitment to preventing illicit resale of its products.

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