Feds Charge Four With Illegally Smuggling Nvidia Ai Chips To China

Federal prosecutors person charged 4 group pinch illegally smuggling Nvidia GPUs and HP supercomputers pinch Nvidia GPUs from nan US to China, according to a tribunal filing spotted by Court Watch. The US government has placed restrictions that forestall Nvidia from trading its astir powerful chips for AI training to China, but Chinese companies for illustration DeepSeek person still created competitory AI models. After DeepSeek released its R1 exemplary earlier this year, Scale CEO Alexander Wang said he thinks China has acold much of Nvidia’s H100 AI chips than group whitethorn think, contempt nan export controls, and operations for illustration this whitethorn thief explicate how. 

Nvidia, which reported quarterly net of a grounds $57 cardinal successful gross on Wednesday.

According to nan documents, only 1 personification has been arrested truthful far, while nan 4 are facing charges including smuggling, conspiracy, and money laundering. The 4 group charged — Mathew Ho, Brian Curtis Raymond, Tony Li, and Harry Chen —  allegedly conspired to export nan GPUs starting successful precocious 2023, including shipping 50 of Nvidia’s coveted H200 GPUs, and respective batches of nan earlier H100 GPUs without a license.

The filing explains that 1 portion of nan strategy was an alleged beforehand institution called Janford Realtor, LLC:

Despite its name, Janford Realtor, LLC was ne'er progressive successful immoderate existent property transactions. Instead, nan institution served arsenic an intermediary for respective unlawful and unlicensed exports to nan People’s Republic of China (“PRC”) of precocious and highly-controlled U.S.-origin Graphics Processing Units (“GPUs”) pinch artificial intelligence (“AI”) and supercomputing applications.

Ho, a US citizen, was nan registered supplier of nan company, and Li, a Chinese national, was identified arsenic a head of nan company.

Bryan Curtis Raymond of Huntsville, Alabama, is listed successful nan filing arsenic nan CEO and sole proprietor of “U.S. Company 1,” which was paid astir $2 cardinal by Janford Realtor. On his LinkedIn, Raymond says he is nan CEO of Bitworks, which he describes arsenic an AI infrastructure institution that “provides income and support for Nvidia and AMD solutions,” and successful another post said he was precocious hired arsenic CTO for different AI unreality computing company, Corvex. Ho and nan different co-conspirators bought GPUs from vendors, including Raymond and his company, utilizing money sent via ligament transportation from slope accounts successful China, while utilizing clone shipping letters and contracts to evade export controls.

“The export strategy is rigorous and comprehensive,” Nvidia spokesperson John Rizzo says successful a connection to The Verge. “Even mini income of older procreation products connected nan secondary marketplace are taxable to strict scrutiny and review. Trying to cobble together datacenters from smuggled products is a nonstarter, some technically and economically. Datacenters are monolithic and analyzable systems, making immoderate smuggling highly difficult and risky, and we do not supply immoderate support aliases repairs for restricted products.”