Two arrested for smuggling AI chips to China; Nvidia says no to kill switches

The U.S. Department of Justice arrested Chuan Geng and Shiwei Yang on August 2 in California for allegedly smuggling advanced AI chips to China through their company, ALX Solutions. They face charges under the Export Control Reform Act, which carries penalties of up to 20 years in prison. The DOJ indicated the chips involved were highly powerful GPUs designed specifically for AI applications, strongly suggesting Nvidia’s H100 GPUs. Evidence showed ALX Solutions shipped these chips to intermediaries in Singapore and Malaysia while receiving payments from entities in Hong Kong and China, apparently to circumvent U.S. export restrictions. In response, Nvidia emphasized its strict compliance with U.S. export controls and stated that any diverted products would lack service and support. The company also rejected recent U.S. government proposals to embed kill switches or backdoors in chips to prevent smuggling, arguing such measures would compromise security and trust in U.S. technology. Nvidia warned that creating vulnerabilities intentionally would benefit hackers and hostile actors, ultimately harming America