US Authorities Arrest Two Individuals for Smuggling $160 Million Worth of Nvidia AI Equipment to China

The U.S. Department of Justice has arrested two men for allegedly violating export control laws by attempting to smuggle Nvidia AI chips worth around $160 million to China. The operation involved disguising genuine Nvidia labels from the H100 and H200 chips as a fictitious brand, “Sandkyan.” Fanyue Gong, a Chinese national, and Benlin Yuan, a Canadian, allegedly collaborated with a Hong Kong logistics firm and a Chinese AI company to evade U.S. restrictions. Alan Hao Hsu, the owner of the Houston business implicated, has pleaded guilty. This bust, part of “Operation Gatekeeper,” highlights the critical role of these AI chips amid escalating U.S.-China tensions. The DOJ stressed that such technology poses national security risks. Recently, Nvidia CEO Jensen Huang argued for increased sales to China, claiming that the sharing of American technology fosters global progress. Nvidia maintains a rigorous export framework to prevent illicit transactions.

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