Two Chinese nationals are facing charges for allegedly attempting to smuggle advanced Nvidia H100 and H200 chips to China, as confirmed by the U.S. Justice Department. This development follows the approval from President Donald Trump for Nvidia to export its H200 chips to Beijing.
The suspects, Fanyue Gong, 43, a Chinese citizen residing in New York, and Benlin Yuan, 58, a Canadian citizen originally from China, reportedly worked in conjunction with employees of a Hong Kong logistics firm and a China-based AI technology company to bypass U.S. export regulations. According to court documents filed by prosecutors, Gong and Yuan conspired to obtain these chips using third-party purchasers, falsely claiming that the chips were intended for U.S. clients or for clients located in third-party countries such as Taiwan and Thailand.
The chips were allegedly delivered to various U.S. warehouses, where their original Nvidia labels were removed and replaced with those of a company that prosecutors suspect is fictitious. Once relabeled, the chips were then allegedly prepared for export.
In a separate complaint, prosecutors indicated that Yuan played a significant role in organizing and recruiting individuals to inspect the improperly labeled chips on behalf of the Hong Kong logistics company. He purportedly advised inspectors to avoid disclosing that the goods were headed for China and was also involved in formulating a plan to secure the return of the seized goods.
Prosecutors believe that this smuggling operation has been ongoing since at least November 2023. While Yuan’s legal representative has not commented on the case, a spokesperson for Gong could not be reached for an immediate response. In a related statement, a spokesperson for the Chinese Embassy in Washington highlighted that the Chinese government expects its citizens abroad to comply with local laws while ensuring their legitimate rights are upheld.
Additionally, another individual, Alan Hao Hsu, 43, along with his company, entered a plea of guilty in October to charges related to smuggling and illegal export activities associated with this scheme.
This situation underscores ongoing tensions regarding technology exports and international relations, particularly surrounding advanced semiconductor technology, which has significant implications for both U.S. national security and China’s technological ambitions.
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