- The US Department of Justice dismantled a smuggling ring that transported $160 million worth of Nvidia H100/H200 GPUs to China and arrested two suspects.
- Operation Gatekeeper revealed that the chips were renamed “SANDKYAN” to circumvent export controls, compromising the security of the US AI.
- Despite the crackdown, President Trump allowed Nvidia to legally sell its GPUs to China.
The US Department of Justice (DoJ) busted a major smuggling operation in which Nvidia chips were sent to China despite an export ban. Two people were arrested.
In October 2025, US police officers arrested one Alan Hao Hsu from Missouri, Texas. He admitted to smuggling at least $160 million worth of Nvidia chips into China through his company Hao Global LLC. Models shipped included Tensor Core H100 and H200 GPUs, both used for high-performance computing and artificial intelligence applications.
Building on these efforts, the Department of Justice is now announcing the arrest of two individuals: Benlin Yuan, CEO of a Virginia information company and subsidiary of a Chinese technology company, and Fanyue Gong, owner of a New York technology company.
Nvidia gets the nod
Working with a Chinese logistics company and an artificial intelligence company, the two worked hard to keep the contents of the shipments and the recipient of the material hidden.
They allegedly sent the Nvidia chips to a warehouse in the US, where they then removed all the Nvidia labels and replaced them with fake “SANDKYAN” labels.
From there, they would try to send them overseas, but not before disguising their true destination. It’s unclear exactly how this happened, but the Justice Department said Yuan lied to authorities when questioned.
It looks like the AI game is heating up and the US is doing everything it can to stop China from taking the lead:
“Operation Gatekeeper has uncovered a sophisticated smuggling network that threatens our nation’s security by targeting cutting-edge artificial intelligence technology to those who wish to use it against American interests,” said United States Attorney Nicholas J. Ganjei for the Southern District of Texas.
“These chips are the pillars of AI superiority and a critical component 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 prosecute anyone who tries to threaten America’s technological progress.”
At the same time, US President Donald Trump Nvidia has given the green light legally sell their lands to China.
IN cyber news