Two Men Accused of Smuggling Restricted Nvidia Chips to China
Two men have been taken into custody in the United States on suspicion of smuggling Nvidia’s H100 and H200 chips to China, the Justice Department announced on Monday. The charges emerged on the same day President Donald Trump authorised Nvidia to resume exports of its H200 chips to Beijing.
Prosecutors say Fanyue Gong, a 43-year-old Chinese national based in New York, and Benlin Yuan, a 58-year-old Canadian citizen originally from China, each worked with employees of a Hong Kong logistics firm and a China-based AI company to sidestep US export restrictions. Court documents state that Gong and his associates sourced chips through straw buyers and intermediaries while claiming they were intended for customers in the United States or in territories such as Taiwan and Thailand.
According to the complaint, the chips were then delivered to several US warehouses where labels were removed and replaced with the name of what investigators believe was a fictitious company before being prepared for export.
Separate charges against alleged organiser
A separate complaint alleges that Yuan recruited and directed individuals to inspect the relabelled chips for the Hong Kong firm. Prosecutors say he instructed inspectors not to reveal that the goods were destined for China and helped draft a cover story aimed at persuading authorities to release seized equipment.
Investigators believe the operation had been running since at least November 2023. Yuan’s lawyer declined to comment and no representative for Gong was immediately available.
A spokesperson for the Chinese Embassy in Washington said China expects its citizens abroad to follow local laws while safeguarding their legal rights.
Guilty plea linked to wider operation
In October, another defendant, Alan Hao Hsu, 43, and his company pleaded guilty to smuggling and unlawful export offences tied to the network. The Justice Department says Hsu received more than $50 mln from China to fund an operation that exported or attempted to export at least $160 mln worth of restricted Nvidia chips.
Nicholas J Ganjei, US attorney for the Southern District of Texas, said Operation Gatekeeper had exposed a sophisticated smuggling network that posed risks to national security by moving sensitive AI technology to actors who might use it against American interests.
A Nvidia spokesperson said the company works with authorities and customers to prevent unauthorised secondary market sales of older products and stressed that legacy chips remain subject to strict review. The United States imposed export restrictions in 2022 limiting China’s access to chips made with American equipment and the Trump administration broadened its restricted entities list in September to include subsidiaries majority owned by sanctioned firms.
