U.S. prosecutors are pulling back the curtain on an alleged smuggling ring that quietly funneled cutting-edge Nvidia AI chips out of America and into the hands of rival nations.
Prosecutors accuse Alan Hao Hsu and two China-linked associates of running a covert pipeline that moved restricted Nvidia H100 and H200 chips out of the United States, according to the DOJ.
According to charging documents, Hsu, along with Benlin Yuan and Fanyue “Tom” Gong, allegedly used straw buyers, falsified paperwork and mislabeled hardware to disguise the true nature and destination of the shipments. Investigators say the group routed the GPUs through US warehouses before exporting them to China, Hong Kong and other restricted locations in violation of federal export control laws.
Court documents show that the network allegedly exported and attempted to export at least $160 million worth of export-controlled Nvidia H100 and H200 GPUs between October 2024 and May 2025. Prosecutors say Hsu and Hao Global received more than $50 million in wire transfers originating from the People’s Republic of China to help finance the purchases and shipments.
Authorities say they have already seized over $50 million in Nvidia technologies and cash tied to the alleged smuggling pipeline.
Says 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 America’s technological edge.”
Hsu has pleaded guilty to smuggling and unlawful export activities and faces up to 10 years in prison at sentencing, while his company, Hao Global, could be fined up to twice the gross gain from the offense. Prosecutors say Yuan is charged with conspiring to violate the Export Control Reform Act, an offense that carries a maximum 20-year sentence and a potential $1 million fine. Meanwhile, Gong is charged with conspiring to smuggle goods out of the United States and faces up to 10 years in prison if convicted.
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