Illegal Export of AI Microchips

Two Chinese nationals, Chuan Geng and Shiwei Yang, have been charged by the U.S. Department of Justice for allegedly exporting sensitive AI microchips to China without proper authorization. The Justice Department announced that these exports, valued at tens of millions of dollars, violated the Export Control Reform Act. This act regulates the export of certain technologies to ensure national security.

Details of the Allegations

Chuan Geng, a lawful permanent resident from Pasadena, California, and Shiwei Yang, an illegal immigrant from El Monte, California, were arrested following a federal investigation. Yang was apprehended on Saturday for overstaying her visa, while Geng surrendered to authorities later that day. Both individuals are accused of using their company, ALX Solutions Inc., to export graphic processing units (GPUs) — crucial components in AI applications — to China without obtaining necessary licenses from the U.S. Department of Commerce.

Court Proceedings and Legal Implications

The accused appeared in U.S. District Court in Los Angeles on Monday. Geng was released on a $250,000 bond, while Yang’s detention hearing is scheduled for August 12. Their arraignment is set for September 11. If convicted, they face a maximum penalty of 20 years in prison.

Export Scheme and Financial Transactions

The complaint details how ALX Solutions Inc. allegedly began operations shortly after new licensing requirements for advanced microchips were implemented by the Department of Commerce. The company reportedly shipped goods through Singapore and Malaysia to disguise their final destination in China. Despite not receiving payments from purported export destinations, ALX Solutions received significant funds from Hong Kong and China-based companies.

National Security Concerns

The case highlights ongoing concerns about Chinese nationals accessing sensitive U.S. technology. The Trump administration has previously warned about potential threats posed by such activities. In response to these challenges, President Donald Trump emphasized the importance of maintaining U.S. leadership in AI technology during a recent summit.