- DoJ dismantled a smuggling ring that moved $160 million worth of Nvidia H100/H200 GPUs to China and arrested two suspects
- Operation Gatekeeper revealed that chips were rebranded “SANDKYAN” to avoid export controls, threatening US AI security
- Despite the crackdown, President Trump authorized Nvidia to sell its GPUs to China legally
The US Department of Justice (DoJ) dismantled a major smuggling operation in which Nvidia chips were shipped to China despite the export ban. Two people were arrested in the process.
In October 2025, US law enforcement arrested one Alan Hao Hsu from Missouri, Texas. He confessed to using his company, Hao Global LLC, to smuggle at least $160 million worth of Nvidia chips into China. The models shipped included the H100 and H200 Tensor Core GPUs, both used for AI apps and high-performance computing.
Now, in a continuation of this activity, the DoJ said two people were arrested: Benlin Yuan, a CEO of a Virginia IT services company and a subsidiary of a Chinese technology company, and Fanyue Gong, an owner of a technology company in New York.
Nvidia gets it OK
Together with a Chinese logistics company and an AI technology company, the duo worked hard to hide the contents of the shipments and where to send the hardware.
They would allegedly send the Nvidia chips to a warehouse in the US, where they would then strip them of all Nvidia labels and replace them with fake “SANDKYAN”.
From there, they would attempt to ship them overseas, but not before disguising their true destination. It is not clear how this was done, but the DoJ explained that Yuan lied to authorities when questioned.
The AI game seems to be heating up and the US is doing everything it can to prevent China from taking the lead:
“Operation Gatekeeper has uncovered a sophisticated smuggling network that threatens our nation’s security by sending cutting-edge artificial intelligence technology to those who would use it against American interests,” said U.S. Attorney Nicholas J. Ganjei of 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 tries to compromise America’s technological edge.”
At the same time, US President Donald Trump gave Nvidia the green light to sell its chips to China – legally.
Via Cyber news
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