Two Chinese nationals, one of whom is an undocumented immigrant, have been apprehended for allegedly exporting sensitive microchips valued at tens of millions of dollars to China, as announced by the Justice Department on Tuesday.
Charges have been filed against Chuan Gen, 28, from Pasadena, California, and Shuwei Yang, also 28, from Elmonte, California, for breaking export control regulations. Prosecutors indicated that these felony charges could lead to a maximum sentence of 20 years in prison. Yang, who overstayed a visa, was arrested on Saturday, while Geng surrendered to authorities later that same day.
Both individuals appeared in U.S. District Court in Los Angeles on Monday, and—interestingly—no pleas were entered. A magistrate judge later released Geng, a legal permanent resident, on a $250,000 bond, while arrangements for Yang’s custody hearing were set for August 12.
Geng and Yang, along with a company called Elx Solutions Inc., are accused of intentionally exporting sensitive technologies, notably Graphic Processing Units (GPUs), to China without obtaining the necessary licenses from the U.S. Department of Commerce. This alleged activity reportedly commenced in October 2022 and continued until July 2025.
The complaint claims that the company was established just after the Commerce Department began enforcing stricter licensing requirements for advanced microchips, which Geng and Yang supposedly exported illicitly. Export and business records indicate that shipments in December 2024, as well as at least 20 earlier shipments, were meant for carriers in Singapore and Malaysia. Notably, the company has not received payments from these entities but has instead received payments from companies in Hong Kong and China, including a significant $1 million payment in January 2024.
Additionally, prosecutors allege that ALX Solutions mislabeled cargo containing GPUs that actually required licenses for export to China, further violating federal law. Geng, Yang, or the company did not seek any licenses from the Ministry of Commerce for these shipments.
The chip in question, produced by leading manufacturers of high-performance AI chips, is regarded as the most advanced GPU available, specifically crafted for applications in fields like self-driving vehicles and medical diagnostics.
Recently, law enforcement executed a search at ALX Solutions’ offices and collected phones owned by Geng and Yang. The DOJ notes that these devices revealed communication about shipping controlled chips to China via Malaysia as a means to evade U.S. export regulations.
The Trump administration has expressed concern over the presence of Chinese citizens in U.S. institutions, particularly in tech firms and universities, citing potential threats to proprietary information. Last month, President Trump highlighted the importance of maintaining U.S. leadership in AI amidst rapid technological advancements, advocating for the removal of barriers and signing three executive orders aimed at facilitating the federal government’s AI efforts while restricting access to certain biased government tools.
