Two Arrested for Smuggling Nvidia AI Chips
Two Chinese nationals residing in California, one of whom is in the U.S. illegally, have been apprehended for allegedly smuggling high-value Nvidia AI chips into Beijing, according to a statement from the Justice Department on Tuesday.
The individuals reportedly shipped advanced graphics processing units, such as the NVIDIA H100 and NVIDIA 4090 GPUs, to China between October 2022 and July 2025 using a company called ALX Solutions, based in El Monte.
Chuan Jeng, 28, from Pasadena, and Seawei Yang, also 28, from El Monte, are facing felony charges under the Export Control Reform Act, which could result in up to 20 years in federal prison.
Yang, who is in the U.S. without legal status after overstaying a visa, was arrested on Saturday; Geng, holding legal permanent residency, later turned himself in to federal authorities that same day.
The chips in question are described as “the most powerful GPU chips available” and are specialized for AI applications like developing self-driving vehicles and medical diagnostic systems.
This arrest follows export restrictions implemented by the Trump administration in May aimed at limiting China’s access to sophisticated technology and chips.
However, reports last month indicated that over $1 billion worth of Nvidia chips have been smuggled into China in the three months following these new restrictions.
An analysis by the Financial Times, which included insights from individuals familiar with various sales contracts, indicated that Chinese suppliers continued selling to data center operators, despite the newly established controls.
ALX Solutions was launched shortly after the Commerce Department began requiring advanced microchip licensing in 2018 during Trump’s presidency. Court documents reveal that Yang and Geng were implicated in shipping these products overseas.
The company allegedly employed a common strategy to evade export restrictions, rerouting illegal shipments to China through other countries.
At least 20 shipments were reportedly sent from the U.S., including one as recent as December, using freight services based in Singapore and Malaysia.
Interestingly, ALX Solutions did not receive any payments from entities in Singapore or Malaysia but did acquire funds from companies located in Hong Kong and China.
A wiretap revealed conversations indicating a plan to divert shipments through Malaysia to bypass U.S. laws, as per the complaint.
Geng was granted release on a $250,000 bond by a federal judge late Monday, while Yang remains in custody pending a detention hearing on August 12. The scheduled arrest is set for September 11.
No additional comments have been provided by the Justice Department.
The identities of the defendants’ legal representatives are currently unknown, and inquiries have been sent to ALX Solutions for their response.
