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DoJ takes down sophisticated network smuggling $160m worth of AI chips to
China

Date:
Tue, 09 Dec 2025 10:10:00 +0000

Description:
Chips are still going to China, just not through illegal channels.

FULL STORY

The US Department of Justice (DoJ) took down a major smuggling operation that
saw Nvidia chips being shipped to China, despite the export ban. Two people
were arrested in the process. 

In October 2025, US law enforcement arrested one Alan Hao Hsu, of Missouri,
Texas. He confessed using his company, Hao Global LLC, to smuggle Nvidia 
chips worth at least $160 million, to China. The models being shipped 
included H100 and H200 Tensor Core GPUs , both used for AI apps and
high-performance computing. 

Now, in a continuation of that activity, the DoJ said two people were
arrested: Benlin Yuan, a CEO of a Virginia IT services company and a
subsidiary of a Chinese tech firm, and Fanyue Gong, an owner of a New York
tech firm. 

Nvidia gets the OK

Together with a Chinese logistics company, and an AI technology firm, the duo
worked hard to conceal  the contents of the shipments, and where they were
sending the hardware to. 

They would reportedly ship the Nvidia chips to a warehouse in the US, where
they would then strip them of all Nvidia labels, and replace them with fake
SANDKYAN ones. 

From there, they would try to ship them overseas, but not before obfuscating
their true destination. It's not clear how this was done, but the DoJ did
explain that Yuan lied to the authorities when asked. 

The AI game seems to be heating up, and the US is doing all it can to prevent
China from taking the lead: 

"Operation Gatekeeper has exposed a sophisticated smuggling network that
threatens our Nations security by funneling cutting-edge AI technology to
those who would use it against American interests," said U.S. Attorney
Nicholas J. Ganjei for the Southern District of Texas. 

"These chips are the building blocks of AI superiority and are integral to
modern military applications. The country that controls these chips will
control AI technology; the country that controls AI technology will control
the future. The Southern District of Texas will aggressively prosecute anyone
who attempts to compromise Americas technological edge."

At the same time, US President Donald Trump gave Nvidia the green light to
sell its chips to China - legally. 

 Via Cybernews 

======================================================================
Link to news story:
https://www.techradar.com/pro/security/doj-takes-down-sophisticated-network-sm
uggling-usd160m-worth-of-ai-chips-to-china

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