U.S. authorities have indicted two Americans and two Chinese nationals on charges of conspiring to illegally export cutting-edge artificial intelligence chips to China via Malaysia and Thailand, bypassing export controls meant to prevent the Chinese government from acquiring advanced technology for military purposes, the Justice Department announced.
The four defendants arrested include a 34-year-old American born in Hong Kong and living in Florida, a 46-year-old American from Huntsville, Alabama, and two Chinese nationals, ages 38 and 45, who live in California and Florida, respectively. They are charged with conspiracy to violate the Export Control Reform Act, smuggling, and money laundering.
Assistant Attorney General for National Security John Eisenberg said the indictment “charges a deliberate and deceptive effort to transship controlled NVIDIA GPUs to China by falsifying documents, creating false contracts, and misleading U.S. authorities.” “The National Security Agency is committed to disrupting this type of black market for sensitive American technology and holding accountable those who participate in this illegal trade.”
According to the indictment, China aims to become a world leader in AI by 2030 and is seeking to use AI for military modernization. To protect U.S. national security, the Department of Commerce introduced licensing requirements for exports of these technologies to China in October 2022.
The four defendants allegedly conspired to illegally export advanced graphics processing equipment to China from September 2023 to November 2025, in violation of U.S. export controls. The co-conspirators used a Tampa-based company as a front to purchase and export illegally regulated GPUs, and one of the defendants supplied the chips through an Alabama-based electronics company, the indictment states.
Starting in October 2022, U.S. export controls restrict the export of advanced chips to China, including Nvidia GPUs and certain legacy semiconductors.
The regulation is forcing U.S. companies, including NVIDIA, to redesign products for the Chinese market and limit performance to comply with U.S. rules. Lawmakers and regulators continue to call for increased enforcement, citing repeated attempts to smuggle or transship restricted chips despite regulations.
In April, Singapore issued an unprecedented advisory warning companies not to use the city-state to evade other countries’ export restrictions on semiconductors and AI technology, following suspicions that potentially evasive Nvidia AI chips were being sent to Malaysia. Singapore has indicted three men on fraud charges over Singapore’s involvement in a U.S. investigation into whether Chinese startup DeepSeek circumvented U.S. regulations on advanced NVIDIA chips.
The conspiracy resulted in the export of 400 NVIDIA A100 GPUs to China between October 2024 and January 2025. Law enforcement intercepted two additional exports containing advanced supercomputers and additional GPUs.
In April, Singapore issued an unprecedented advisory warning companies not to use the city-state to evade other countries’ export restrictions on semiconductors and AI technology, following suspicions that potentially evasive Nvidia AI chips were being sent to Malaysia.
Despite knowing that a license was required, none of the co-conspirators sought or obtained a license to export. Instead, the indictment alleges, the company lied about where the GPUs would be shipped to avoid U.S. export controls. The co-conspirators allegedly received more than $3.89 million in wire transfers from China to fund the scheme.
The defendant faces a maximum sentence of 20 years in prison for export control violations, 10 years for smuggling, and 20 years for money laundering.
