U.S. tech execs smuggled Nvidia chips to China, prosecutors say

The U.S. Attorney’s Office for the Southern District of New York on Thursday charged people associated with a U.S. server maker with illegally diverting billions of dollars in artificial intelligence servers to China.

The U.S. government has been trying to figure out how high-powered chips have reached China without authorization, as U.S. companies such as Anthropic and OpenAI face challenges from DeepSeek and other Chinese rivals.

In an indictment filed with the U.S. District Court for the Southern District of New York, the U.S. government alleged that Yih-Shyan “Wally” Liaw, Ruei-Tsan “Steven” Chang and Ting-Wei “Willy” Sun worked together to violate the Export Control Reform Act.

Nvidia’s graphics processing units have been in demand across the world for training generative AI models.

The server company’s products containing Nvidia chips “are subject to strict U.S. export controls barring their sale to China without a license,” the plaintiff said in the indictment. “Those controls are in place to protect U.S. national security and foreign policy interests, among other things.”

U.S. President Donald Trump initially sought to prevent China from obtaining the processors. But in December he said he told China’s President Xi Pinging that the U.S. would permit Nvidia to ship H200 GPUs to China, “under conditions that allow for continued strong National Security.” Earlier this week Nvidia CEO Jensen Huang said the chipmaker is restarting manufacturing to fulfill H200 purchase orders from China.

Last summer, Nvidia had received licenses to export the H20 chip to China, with Huang agreeing to provide the U.S. with 15% of its sales in China.

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