The US gov shut down a $160 million smuggling operation trying to get Nvidia H200 chips into China and also, err, says the GPUs won't be restricted anymore
The realm of international corporate smuggling and espionage is one that I tend to forget exists, sitting here in relatively small-town England, doing normal things like a normal person. But that realm is there, and there really are people out there organising corporate smuggling operations for tens of millions worth of product.
I am, of course, talking about the world's hottest kind of corporate technology today: Nvidia AI accelerators. In the latest case of smuggling shenanigans, the US Department of Justice (DoJ) reports that it's seized "over $50 million in Nvidia technologies and cash" from some who had been attempting to smuggle H100 and H200 GPUs to China, both of which were until very recently banned from being shipped to China, and the former of which still is.
And I do mean very recently, because it's only earlier today that President Trump said China will be allowed to receive H200 shipments, albeit for a 25% fee (via Reuters). I guess that's just salt in the wounds for those charged in this smuggling case.
According to the DoJ: "Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company, Hao Global LLC, both pleaded guilty to smuggling and unlawful export activities on Oct. 10, 2025.
"According to now unsealed court documents, between October 2024 and May 2025, Hsu and others knowingly exported and attempted to export at least $160 million worth of export-controlled Nvidia H100 and H200 Tensor Core graphic processing units (GPUs)."
The DoJ says that Hsu, his company Hao Global LLC, and others received $50 million in wire transfers from China to fund the smuggling scheme. Also charged are two America-based People's Republic of China (PRC) natives, who "independently conspired with employees of a Hong Kong-based logistics company and a China-based AI technology company to circumvent U.S. export controls."
The "complex scheme", according to the criminal complaint, involved getting the GPUs through intermediaries and "falsely indicating that the goods were for U.S. customers or customers in third countries that do not require a license to export." They were then de-labelled and re-labelled with the name of a fake company, "SANDKYAN." Paperwork allegedly "misclassified the goods as generic computer parts."
One of the defendants could face up to 20 years in prison and up to a $1 million fine, while the other two, including Hsu, could each face up to 10 years in prison.
The H100 and H200 chips are restricted because the US considers them too advanced to allow China to get their hands on. Texas Attorney Nicholas J. Ganjei explains: "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."
There's been plenty of talk about restricted Nvidia chips ending up in China—including third-party investigations into the possible smuggling methods, such as via an Indonesian telecoms company, for instance. But until now, there's been far less—though more than nothing—in the way of actual criminal investigations and cases.
China has actually been looking to get away from its dependence on foreign AI chips, too. To this end, China is reportedly going to limit H200 imports, though it's unclear exactly what limits will be placed on the chips.