The US Department of Justice has announced the arrest of two Chinese citizens in connection with the illegal supply of graphics processors, likely Nvidia H100, intended for the artificial intelligence sector. The total value of the smuggling operations is estimated to be in the tens of millions of dollars.
This is reported by Finway
Details of the Investigation and the Role of ALX Solutions
The detainees, Chuan Heng and Shiwei Yang, were arrested on August 2 in California on suspicion of violating the “Export Control Reform Act.” This is a serious offense that carries a penalty of up to 20 years in prison. According to the investigation, through their company ALX Solutions, they organized the export of “sensitive technologies” from the US to China, including advanced graphics processors, which are described in the documents as “the most powerful on the market” and specifically designed for AI applications.
The investigation found that ALX Solutions was sending equipment to transportation companies in Singapore and Malaysia, with funding coming from China and Hong Kong. The case materials also revealed correspondence related to the supply of equipment to Malaysia, which was likely conducted to circumvent US export restrictions.
Nvidia’s Position on the Incident and Control Initiatives
Nvidia Corporation, in its statement, emphasized that it thoroughly vets its partners and does not service redirected products. A representative from Nvidia stated that the company only collaborates with reputable partners who comply with US export control regulations.
“Smuggling is a thankless task. We primarily sell products to well-known partners who help adhere to US export control regulations,” said the corporation’s representative.
The situation is unfolding amid heightened efforts by Washington to restrict China’s access to advanced technologies in the field of artificial intelligence. One proposal involves implementing tracking systems or emergency “kill switches” in chips. However, Nvidia considers such ideas excessive and dangerous for security—on the company’s corporate blog, it noted that such measures only increase risks to digital infrastructure and could become a “gift for hackers.”
Previously, China had already accused Nvidia of creating a backdoor in the H20 AI chips, which has caused additional tensions in the technological sphere between the countries.