Two ALX Members Arrested for Trafficking Billions in NVIDIA GPUs to China: Black Market Exposed
What happens when cutting-edge AI technology slips through the cracks of international trade laws?
In a stunning bust, two Chinese nationals tied to California-based ALX Solutions were arrested for illegally shipping tens of millions, potentially billions in NVIDIA AI chips to China, fueling a black market for GPUs critical to military and tech advancements.
El Monte-based company, ALX Solutions, Busted August 5th
On August 2, 2025, federal agents arrested Chuan Geng and Shiwei Yang, both 28, in California for orchestrating a sophisticated scheme to smuggle NVIDIA’s H100 GPUs and other AI chips to China.
Court filings reveal a $1 million payment from a China-based firm in January 2024, hinting at the scale of illicit profits.
The operation, detailed by the
U.S. Department of Justice, involved over 20 shipments routed through Singapore and Malaysia to evade U.S. export controls. Could this breach signal a broader black market threat?
Chuan Geng and Shiwei Yang | ALX's inside Operations Facing Significant penalties and Jail Time
Chuan Geng, a lawful permanent resident, handled ALX Solutions’ finances, while Shiwei Yang, who overstayed her visa, served as company secretary. Founded in 2022 shortly after U.S. export controls tightened, ALX Solutions allegedly exploited loopholes by falsifying end-user data to major suppliers like
Super Micro Computer.
A 2023 invoice worth $28.4 million claimed chips were destined for a nonexistent Singapore company, raising red flags. Seized phones revealed incriminating communications about routing chips through Malaysia to dodge U.S. laws. Is ALX a rogue outlier, or part of a larger network?
The DOJ notes Singapore and Malaysia as common transshipment hubs, masking illegal flows to China.
- Over 200 NVIDIA H100 chips were purchased from Super Micro Computer, mislabeled for Singapore and Japan.
Why are NVIDIA GPUs being smuggled at such a High Rate in 2025 to the Chinese ILLEGAL GPU Market?
NVIDIA’s H100 GPUs, described as the “most powerful chip on the market,” are critical for training large language models, self-driving cars, and medical diagnostics. China, a key market for NVIDIA’s data center and AI applications, faces strict U.S. export bans since 2022 to curb military advancements. The H100’s capabilities make it a prime target for smuggling, with estimates suggesting billions in chips have reached China illicitly.
Reuters report
confirms these chips power advanced AI, raising national security concerns. Can the U.S. plug these leaks before military tech is compromised? China retaliated with bans on
gallium and germanium, critical for semiconductors, as reported by Al Jazeera.
U.S. Response: Cracking Down and Closing Gaps
The DOJ charged Geng and Yang with violating the Export Control Reform Act, facing up to 20 years in prison. Geng was released on $250,000 bond, while Yang, an illegal resident, awaits a detention hearing. The FBI and Commerce Department are probing further, with NVIDIA emphasizing compliance and rejecting kill-switch proposals as security risks. The U.S. is bolstering domestic chip production via the CHIPS Act, with $39 billion allocated to reduce reliance on foreign tech. But with China’s AI market growing 20% annually, per Statista, enforcement remains a cat-and-mouse game. Will these arrests deter future smugglers?
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