- DoJ dismantled smuggling ring transporting $160 million worth of Nvidia H100/H200 GPUs to China, arresting two suspects
- Operation Gatekeeper revealed that the chips had been renamed “SANDKYAN” to evade export controls, threatening the security of US AI.
- Despite the crackdown, President Trump allowed Nvidia to legally sell its GPUs to China
The US Department of Justice (DoJ) has shut down a major smuggling operation in which Nvidia chips were shipped to China, despite an export ban. Two people were arrested in the process.
In October 2025, US law enforcement arrested one Alan Hao Hsu from Missouri, Texas. He admitted to using his company, Hao Global LLC, to smuggle Nvidia chips worth at least $160 million to China. The models shipped included Tensor Core H100 and H200 GPUs, both used for AI applications and high-performance computing.
Now, in a continuation of this activity, the DoJ said two people have been arrested: Benlin Yuan, CEO of a Virginia IT services company and subsidiary of a Chinese technology company, and Fanyue Gong, owner of a New York technology company.
Nvidia gets the OK
Working with a Chinese logistics company and an AI technology company, the duo worked hard to conceal the contents of the shipments and where they were sending the materials.
They allegedly shipped the Nvidia chips to a warehouse in the United States, where they would then strip them of all Nvidia labels and replace them with fake “SANDKYAN” ones.
From there, they would attempt to ship them overseas, but not before obscuring their true destination. It’s unclear exactly how this was done, but the DoJ explained that Yuan lied to authorities when asked.
The AI game appears to be heating up, and the United States is doing everything it can to prevent China from taking the lead:
“Operation Gatekeeper revealed a sophisticated smuggling network that threatens our nation’s security by funneling cutting-edge AI technology to those who would use it against American interests,” said United States Attorney Nicholas J. Ganjei for the Southern District of Texas.
“These chips are the building blocks of AI superiority and are an integral part of 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 pursue anyone who attempts to undermine America’s technological advance.”
At the same time, US President Donald Trump gave Nvidia the green light to sell its chips to China – legally.
Via Cybernews
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