The Southern District of Texas announced the seizure of more than $50 million in NVIDIA GPUs bound for China in violation of US export laws. Authorities arrested two businessmen, one of them the owner of a Houston company, accused of smuggling the chips used to train and run AI models.
“Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation’s security by funneling cutting-edge AI technology to those who would use it against American interests,” said US Attorney Nicholas J. Ganjei. The investigation had been ongoing since at least last year and centers on the illicit export or attempted export of at least $160 million worth of NVIDIA H100 and H200 GPUs. The H200 chips are the very same that the Trump administration announced a revenue-sharing agreement for today, allowing NVIDIA to sell them to “approved customers” in China.
The smuggling operation used a combination of falsified paperwork, purposefully misclassified goods, straw purchasers and even removing the NVIDIA labels on GPUs to ship them to both mainland China and Hong Kong. The conspirators face between 10 and 20 years in prison if convicted.
The H200 chips in question are more powerful than the H20 chip specifically designed to comply with US export restrictions. Production of the H20, however, was reportedly halted shortly after the Trump administration struck a revenue-sharing deal with NVIDIA, after which China began heavily discouraging local companies from buying them.
Illicit sales to China are nothing new and occur against the backdrop of an AI technology race and tight export controls. NVIDIA is still prevented from selling its highest-end Blackwell chips to China, with the US hoping to keep an edge over foreign competition.
