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Federal investigators have charged four individuals, including two US citizens, with smuggling Nvidia's AI GPUs to China, bypassing the US' strict export controls.
The four suspects allegedly sent 400 Nvidia A100 units in two shipments; the chips can cost up to $20,000 each, depending on the configuration. The group also tried to export Nvidia's more advanced H100 and H200 GPUs to China, but law enforcement seized the shipments, according to the US Justice Department. In total, the suspects allegedly received over $3.89 million in wire transfers from unidentified Chinese buyers.
"Despite knowing that licenses were required to export these items to the PRC [People’s Republic of China], none of the conspirators ever sought or obtained a license for any of these exports. Instead, they lied about the intended destination of the GPUs to evade US export controls,” the Justice Department added.
US officials have become increasingly worried about Chinese companies finding ways to source Nvidia GPUs, despite export controls. The US is concerned that these GPUs could be used to power AI technologies that bolster China’s military, while also unleashing new surveillance tools.
However, others, most notably Nvidia, have argued that the US should permit the sale of AI GPUs to China. Instead, the Trump administration has cleared Nvidia and AMD to sell downgraded GPUs to the country. However, actual exports have yet to proceed, despite the Chinese government itself raising concerns about Nvidia’s GPUs.
The Justice Department’s indictment accuses the four suspects of using a company called “Janford Realtor” in Florida as a cover for the smuggling scheme. The two US citizens, 34-year-old Hon Ning “Matthew” Ho and 46-year-old Brian Curtis Raymond, allegedly conspired to export the sensitive GPUs to China from September 2023 to as recently as this month.
They also worked with two Chinese nationals based in the US, 38-year-old Cham “Tony” Li and 45-year-old Jing “Harry” Chen, to smuggle the CPUs into China. To bypass scrutiny, the group created fake contracts that claimed the GPUs were headed to Malaysia and Thailand.
“Ho and Chen were arrested and appeared in court in the Middle District of Florida, while Raymond was arrested and appeared in the Northern District of Alabama,” the Justice Department said. “Li was also arrested yesterday and is scheduled to appear today in the Northern District of California.”
The suspects now face up to 50 years in prison if convicted on all charges, which also include money laundering, in addition to the smuggling and export control violations. In August, the US also caught another pair of Chinese nationals trying to smuggle Nvidia GeForce RTX 4090 and 5090 graphics cards and H100 AI GPUs into China.