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The Department of Justice has announced the arrest of two Chinese nationals accused of illegally exporting tens of millions of dollars’ worth of advanced AI chips to China.

Some shit you should know before you read: Back when President Biden was in office, the United States tightened export controls on advanced semiconductor technologies to China in an effort to slow down China’s military modernization. These export controls included a ban on US companies and citizens from supplying China with high-performance AI chips without a license from the Department of Commerce’s Bureau of Industry and Security. Since returning to office, President Trump has continued to enforce these restrictions and has even considered expanding the scope of export bans to include broader categories.

What’s going on now: In a press release, the DOJ announced the arrests of Chuan Geng and Shiwei Yang, two Chinese nationals living in California, for allegedly orchestrating an illegal export scheme involving tens of millions of dollars’worth of advanced AI chips (specifically, high-performance GPUs like Nvidia’s H100 and GeForce RTX 4090) to China. Geng, a lawful permanent US resident, and Yang, who was in the US illegally after overstaying her visa, operated through their company ALX Solutions Inc.

According to court documents, the alleged scheme ran from October 2022 through July 2025, during which ALX Solutions made more than 20 illegal shipments of restricted chips. The company disguised the true destination of the hardware by routing shipments through freight-forwarding companies in Singapore and Malaysia, regions commonly used to mask final destinations in China. Invoices and shipping records revealed that these companies often didn’t exist at their listed addresses, and ALX never received payments from them. Instead, payments (totaling in the millions) came directly from companies based in China and Hong Kong, including a $1 million payment in January 2024.

The DOJ said Geng and Yang attempted to conceal their activity by mislabeling shipments and declaring them as compliant with US regulations, even though the contents included export-controlled AI chips. In one example, ALX claimed a $28.4 million shipment was for a legitimate Singapore customer, but US officials later discovered that the recipient company didn’t exist. Law enforcement also executed a search warrant at ALX Solutions’ office, where they seized phones belonging to Geng and Yang. These devices reportedly contained incriminating communications, including discussions about intentionally shipping restricted chips to China via Malaysia to avoid detection by US authorities.

Geng surrendered to authorities voluntarily, while Yang was arrested on a Saturday. Both made initial appearances in federal court in Los Angeles, and if convicted, they face up to 20 years in federal prison.