Three US-based businessmen face potential prison sentences after authorities dismantled a smuggling network accused of funneling hundreds of millions of dollars worth of Nvidia GPUs to China.

The US Department of Justice [1]said the network directly threated US security by seeking to put cutting edge AI technology in adversarial hands.

Nicholas J. Ganjei, U.S. Attorney for the Southern District of Texas, said: “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.”

[2]

Ganjei’s stark warning to anyone plotting to send Nvidia’s top end chips to China came as US President [3]Donald Trump gave the green light to Nvidia to ship its H200 parts to China , with Washington taking a 25 percent cut.

[4]

[5]

Trump announced on Truth Social that neither Nvidia’s latest Blackwell nor forthcoming Rubin components were “part of this deal”. He said Chinese leader President Xi had responded positively to the move.

Xi’s positive response may be some comfort to the businessmen just fingered by the DoJ for trying to get Nvidia silicon to China ahead of Trump’s decision.

[6]Four charged over alleged plot to smuggle Nvidia AI chips into China

[7]Trump and Xi ease trade tensions, but Nvidia still can't sell Blackwell in China

[8]Senate says Nvidia chips are for America first as China tightens import controls

[9]Trump's tariff‑shaped stick can't beat reality on US chip fabbing

[10]As Xi and Putin chase immortality, let's talk about digital presidents-for-life

[11]No chips for you! Senator wants Americans to get first dibs on GPUs, restrict sales to others

[12]A billion dollars' worth of Nvidia chips fell off a truck and found their way to China, report says

According to the DoJ, Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company, Hao Global LLC, “pleaded guilty to smuggling and unlawful export activities” of at least $160 million worth of export-controlled Nvidia H100 and H200 Tensor Core GPUs. Hsu will be sentenced in February, and faces up to ten years in the slammer.

Two US-based PRC natives were also charged in relation to the scheme.

[13]

The DoJ said Benlin Yuan, 58, the chief executive officer of a Sterling, Virginia, IT services company that's a US subsidiary of a Beijing-based IT biz, was arrested in November and charged with conspiring to violate the Export Control Reform Act (ECRA). Yuan faces up to 20 years in jail if convicted and remains in custody pending further criminal proceedings.

Brooklyn-based Fanyue Gong, also known as Tom Gong, 43, was arrested in New York on December 3. Gong was charged with conspiring to smuggle goods out of the US. He faces up to ten years if convicted and remains in custody. ®

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[1] https://www.justice.gov/opa/pr/us-authorities-shut-down-major-china-linked-ai-tech-smuggling-network

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aThVlygTh0tCvRuoCOGLdAAAAEE&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] https://www.theregister.com/2025/12/09/trump_gpu_export_ban_reversal/

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aThVlygTh0tCvRuoCOGLdAAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

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[6] https://www.theregister.com/2025/11/21/nvidia_china_smuggling_charges/

[7] https://www.theregister.com/2025/10/30/us_to_reduce_tariffs_china/

[8] https://www.theregister.com/2025/10/10/nvidia_chips_us_china/

[9] https://www.theregister.com/2025/09/28/trump_1_1_chip_rule_too_late/

[10] https://www.theregister.com/2025/09/07/immortal_digital_dictators/

[11] https://www.theregister.com/2025/09/04/us_senator_americans_first_ai_sillicon/

[12] https://www.theregister.com/2025/07/24/nvidia_chips_china_whoops/

[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aThVlygTh0tCvRuoCOGLdAAAAEE&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[14] https://whitepapers.theregister.com/