Two Arrested for Exporting Sensitive AI Chips
Authorities in Southern California have arrested two individuals for the illegal export of microchips valued in the tens of millions, used in artificial intelligence (AI) applications, to China.
According to a release from the US Department of Justice (DOJ), the accused, both 28 years old and identified as Chuan Geng and Shiwei Yang, face charges under the Export Control Reform Act. This is a serious felony with a potential maximum prison sentence of 20 years.
Geng reportedly turned himself in to federal authorities on a recent Saturday, while Yang was apprehended earlier that day.
Between 2022 and last month, Geng and Yang shipped graphics processing units, labeled as “specialized computer parts for modern computing,” through a firm based in El Monte called Alx Solutions Inc.
“The examination of export and business records indicates that shipments made in December 2024, along with at least 20 others prior, involved exports from the US to both Singapore and Malaysian freight carriers,” the DOJ noted.
Payments to Alx Solutions included one substantial transaction of $1 million from China in January 2024, which did not stem from the intended recipients but rather from companies based in Hong Kong and China.
“Alx Solutions has not directly received payments from supposed exporters. Instead, multiple payments came from entities in Hong Kong and China,” the DOJ added.
Allegedly, the microchips in question were produced by a manufacturer known for crafting high-performance AI chips, described as the “most powerful GPU chip on the market.” These chips are specifically intended for applications in self-driving vehicles, medical diagnostic equipment, and various AI functions, requiring special authorization from the US Department of Commerce for export to China.
Geng, a legal permanent resident, was released after posting a $250,000 bond. Meanwhile, Yang, who had overstayed his visa, is set for a detention hearing on August 12.
