An Nvidia Corp (NASDAQ:NVDA) GPU smuggling case has intensified calls in Washington for stronger safeguards to keep advanced U.S. chips out of China's hands.
Lawmakers Sound Alarm After DOJ Indictments
On Thursday, the U.S. Justice Department charged four individuals — two American citizens and two Chinese nationals — with conspiring to illegally export restricted Nvidia AI chips to China, reported Reuters.
They allegedly routed 400 Nvidia A100 chips through Malaysia between October 2024 and January 2025. Authorities later blocked attempts to move 10 supercomputers containing Nvidia H100 chips and 50 H200 GPUs through Thailand.
The scheme also involved a Tampa-based front company and nearly $4 million in wire transfers from China to finance the operation, the report said.
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Moolenaar: China Will ‘Do Whatever It Must' To Catch Up
The case has renewed urgency in Congress for tougher chip-tracking laws. John Moolenaar (R-Mich.), chair of the House Select Committee on China, said the incident underscores Beijing's determination to close the technology gap with the U.S.
“China recognizes the superiority of American AI innovation and will do whatever it must to catch up,” he stated, adding, “That’s why the bipartisan Chip Security Act is urgently needed.”
The bill, introduced in May, would require location verification for advanced chips and mandate reporting of potential diversion risks.
Trump Pushes For Federal AI Control Amid Fears China Could Overtake US
This comes after it was reported that President Donald Trump is weighing an executive order that would give the federal government sweeping control over AI policy.
Earlier this week, Trump also warned on Truth Social that China could "easily catch us" unless the U.S. adopts a unified, national approach to regulating AI.
Previously, Kevin O'Leary also said that China is "crushing" the U.S. on energy capacity, arguing that America's power grid is already stretched thin while China can rapidly deploy new coal plants with minimal opposition.
Nvidia CEO Jensen Huang has expressed similar concerns, noting that China's cheaper energy and faster permitting processes pose significant long-term competitive advantages.
Nvidia places in the 98th percentile for Growth and the 92nd percentile for Quality in Benzinga’s Edge Stock Rankings, highlighting its standout performance relative to industry peers.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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