US authorities have charged two American citizens and two Chinese nationals with conspiring to illegally export cutting-edge artificial intelligence chips to China through Malaysia and Thailand, evading export controls designed to prevent Beijing from acquiring advanced technology for military purposes, the Justice Department announced.
The four defendants arrested include a 34-year-old US citizen born in Hong Kong and residing in Florida, a 46-year-old American from Huntsville, Alabama, and two Chinese nationals aged 38 and 45 residing in California and Florida respectively. They face charges including conspiracy to violate the Export Control Reform Act, smuggling and money laundering.
The indictment ‘alleges a deliberate and deceptive effort to transship controlled NVIDIA GPUs to China by falsifying paperwork, creating fake contracts, and misleading U.S. authorities,’ said John Eisenberg, Assistant Attorney General for National Security. ‘The National Security Division is committed to disrupting these kinds of black markets of sensitive U.S. technologies and holding accountable those who participate in this illicit trade.’
According to the indictment, China seeks to become the world leader in AI by 2030 and seeks to use AI for military modernisation. To protect US national security, the Department of Commerce implemented licence requirements in October 2022 for exports of these technologies to China.
From September 2023 to November 2025, the four defendants allegedly conspired to violate US export controls by illegally exporting advanced graphics processing units to China. The conspirators used a Tampa-based company as a front to purchase and then illegally export controlled GPUs, with one defendant supplying chips through his Alabama-based electronics company, the indictment stated.
Since October 2022, US export controls restrict advanced chips to China, including Nvidia GPUs and certain legacy semiconductors.
The restrictions have forced American companies, including NVIDIA, to redesign products for the Chinese market and limit performance to comply with US rules. Lawmakers and regulators continue to push for stronger enforcement, citing repeated attempts to smuggle or transship restricted chips despite the controls.
In April, Singapore issued an unprecedented advisory warning companies against using the city-state to evade other countries’ export controls on semiconductor and AI technologies, after suspicions that controlled Nvidia AI chips had been sent to Malaysia in a possible sanctions evasion scheme. Singapore charged three men with fraud after the city-state was implicated in a US investigation into whether Chinese start-up DeepSeek had circumvented American restrictions on advanced Nvidia chips.
The conspiracy resulted in 400 NVIDIA A100 GPUs being exported to China between October 2024 and January 2025. Law enforcement disrupted two additional attempted exports involving advanced supercomputers and additional GPUs.
In April, Singapore issued an unprecedented advisory warning companies against using the city-state to evade other countries’ export controls on semiconductor and AI technologies, after suspicions that controlled Nvidia AI chips had been sent to Malaysia in a possible sanctions evasion scheme.
Despite knowing that licences were required, none of the conspirators sought or obtained authorisation for the exports. Instead, they lied about the intended destination of the GPUs to evade US export controls, the indictment alleged. The conspirators allegedly received over $3.89 million in wire transfers from China to fund the scheme.
The defendants face maximum sentences of 20 years’ imprisonment for export control violations, ten years for smuggling, and 20 years for money laundering.
