Two individuals of Chinese nationality face allegations for unlawfully exporting artificial intelligence chips to China.
In a significant development, two Chinese nationals, Chuan Geng and Shiwei Yang, have been apprehended and charged with unauthorized export of high-value AI chips to China. The individuals, who are residents of California, are facing federal charges for allegedly violating the Export Control Reform Act of 2018.
According to the Department of Justice (DOJ), Geng, a lawful permanent U.S. resident, and Yang, an individual who overstayed her visa, owned ALX Solutions Inc., a technology company in El Monte that specialized in high-powered processors. The company is at the centre of the investigation, with the DOJ claiming that ALX Solutions exported thousands of dollars worth of advanced chips from the United States to China without necessary licenses for the past three years.
The allegations suggest that the duo circumvented U.S. export regulations by shipping controlled high-powered central, graphics processing units, and AI-capable microchips to China via Malaysia. The chips, which have applications in AI technologies such as self-driving cars and medical diagnosis systems, include Nvidia's H100 graphics processing units (GPUs), subject to U.S. export restrictions.
The FBI and the Department of Commerce Bureau of Industry and Security continue to investigate the case. In December 2024, a shipment containing Nvidia's H100 and GeForce RTX 4090 GPUs was flagged by U.S. customs.
ALX Solutions, according to court documents, employed three individuals. Chuan Geng was responsible for financial aspects, Shiwei Yang served as secretary, and the identity of the chief executive was not disclosed. All three individuals had substantial decision-making authority regarding operations and shipping for the company. It was also revealed that ALX Solutions did not apply for or secure a license from the U.S. Department of Commerce for the export of Nvidia chips.
Super Micro Computer, a supplier of Nvidia chips, has not yet issued a comment in response to these claims. However, they stated previously that they are dedicated to adhering to U.S. export regulations and would cooperate with legal authorities during any proceedings. Nvidia collaborates only with reputable partners to ensure compliance with export control regulations, and any attempts to smuggle its chips would be ineffective, an Nvidia representative stated.
The case is ongoing, with both Geng and Yang appearing in federal court in Los Angeles on Monday. If convicted, they could each face up to 20 years in prison. ALX Solutions was compensated by various Hong Kong and China-based businesses, including a payment of $1 million from a China-based firm in January 2024.
It is worth noting that a related entity named ALX-Cloud, focused on cloud computing services, identifies itself as a subsidiary of ALX Solutions. However, ALX Solutions does not appear to have an operational website.
[1] Source: The Wall Street Journal [2] Source: Reuters [3] Source: The New York Times
- The case involving Chuan Geng and Shiwei Yang, accused of unauthorized export of AI-capable microchips, highlights a fusion of general news and crime-and-justice, as the duo allegedly bypassed export regulations to export advanced technology.
- Artificial-intelligence technologies, such as self-driving cars and medical diagnosis systems, are the application focus of the high-powered central processing units and AI-capable microchips at the center of the legal investigation against ALX Solutions Inc.
