The US Department of Justice has announced the arrest of two Chinese citizens in connection with the illegal supply of artificial intelligence equipment worth “tens of millions of dollars” to the People’s Republic of China. According to investigators, this involves high-performance Nvidia H100 graphics processors used for artificial intelligence applications.
This is reported by Business • Media
Details of the Case and Charges
The accused, Chuan Gen and Shiwei Yang, were arrested in California on August 2. They are charged with violating the “Export Control Reform Act,” a felony that could lead to 20 years in prison. According to case materials, they organized the export of “sensitive technologies” to China through the company ALX Solutions, including powerful graphics processors that the Justice Department estimates are “the most powerful on the market” and “specifically designed for AI applications.”
The investigation found that ALX Solutions was supplying equipment through transportation companies in Singapore and Malaysia, with payments made by companies from China and Hong Kong. Correspondence regarding shipments to Malaysia was also discovered, which was part of a scheme to circumvent US export restrictions.
Nvidia’s Position and Discussion on Export Control
In response to the investigation, Nvidia emphasized that it thoroughly vetts its partners and does not service redirected products. A company representative stated:
“Smuggling is a thankless task. We primarily sell products to well-known partners who help comply with US export control regulations,” said the corporation’s representative.
The case is being examined against the backdrop of active efforts by US authorities to limit China’s access to advanced technologies in the field of artificial intelligence. One initiative has been the proposal to embed special tracking systems or emergency “kill switches” in chips. However, Nvidia has expressed strong disagreement with such measures, calling them “unreasonable and excessive.”
In a corporate blog, the company highlighted that such “backdoors” or switches could create serious security risks and become a “gift for hackers,” which, according to Nvidia, would undermine trust in American technologies and the global digital infrastructure.
Previously, China had already accused Nvidia of creating a backdoor in the H20 AI chips.