US charges 2 with illegally shipping Nvidia AI to China • The Register

Federal authorities in the US have charged two Chinese nationals with secretly exporting advanced AI chips to China.

According to the feds, Chuan Geng and Shiwei Yang set up a company called ALX Solutions in October 2022, just after the Biden administration slapped heavy export controls on high-end GPUs in an attempt to stymie the Chinese AI industry.

The California-based operation is alleged to have shipped the goods through last month, before its operators were nabbed over the weekend, per the Justice Department, which claimed the shipment contained the “most powerful GPU chip on the market.”

The feds claim they seized the phones belonging to Geng and Yang which they allege “revealed incriminating communications between the defendants, including communications about shipping export-controlled chips to China through Malaysia to evade US export laws.”

The official statement doesn’t name the export-license-demanding chips in question, but the BBC reports that they included Nvidia’s H100 AI processor and GeForce RTX 4090 GPU (rather than the downrated 4090D), both of which came out in 2022. We have asked Nvidia to confirm.

There have also recently been reports of Nvidia’s newer B200 AI processor evading US export controls.  

Nvidia insists the new arrests demonstrate how people can’t get away with smuggling its top-shelf products. But then again, it has every reason to insist the current system is working.

The company’s dominance of the AI market makes it a central player in the US and China’s geopolitical struggles. That position recently got more uncomfortable, with Beijing quizzing it about potential backdoors in the H20 chips that the US allows it to export to China, and with Trump advisors floating the idea offorcing location-tracking capabilitiesinto Nvidia’s wares.

“Embedding backdoors and kill switches into chips would be a gift to hackers and hostile actors,” Nvidia chief security officer David Reber Jr wrote in a Tuesday blog post that seemed designed to warn the US authorities as much as to placate those in China. “It would undermine global digital infrastructure and fracture trust in U.S. technology.” ®