Two Chinese nationals have been arrested by the U.S. Justice Department for allegedly smuggling Nvidia Corp (NASDAQ:NVDA) chips to China.
Gong And Yuan Arrested
The Justice Department has charged Fanyue Gong, a New York–based Chinese citizen, and Benlin Yuan, a Canadian national originally from China, for allegedly helping smuggle Nvidia's H100 and H200 chips into China. The two men allegedly collaborated with staff at a Hong Kong–based logistics firm and a China-based AI technology company to evade U.S. export controls.
Prosecutors claim that Gong and his associates acquired the Nvidia chips through intermediaries and straw purchasers, falsely asserting that the goods were intended for U.S. or third-country customers. The chips were subsequently shipped to multiple U.S. warehouses, where workers removed the Nvidia labels and replaced them with labels from a company believed to be fictitious.
According to a separate complaint, Yuan coordinated individuals to examine the mislabeled chips on behalf of the Hong Kong logistics firm. He allegedly instructed the inspectors to hide the chips' intended destination and to fabricate a narrative for the company to present if U.S. authorities seized the goods.
The Justice Department estimates that the smuggling operation has been ongoing since at least November 2023.
Previous Crackdown On Nvidia Chips Smuggling
The arrest of Gong and Yuan comes at a time when President Donald Trump confirmed that NVIDIA can export its H200 chips to approved customers in China and other countries, while its advanced Blackwell and future Rubin chips remain restricted to the U.S. market.
In a related case, the Justice Department charged four individuals, including two American citizens and two Chinese nationals, for conspiring to illegally export restricted Nvidia AI chips to China. The chips were allegedly routed through Malaysia between October 2024 and January 2025.
China’s efforts to reduce its reliance on U.S. technology have also been evident in its customs crackdown on Nvidia’s AI chips. In October 2025, China reportedly launched a sweeping customs crackdown on Nvidia’s AI chips, with a focus on the H20 and RTX Pro 6000D chips, which were designed to comply with U.S. export controls.
These incidents underscore the growing competition between the U.S. and China in the tech sector, with Nvidia at the center of this geopolitical struggle. The outcome of these cases could have significant implications for the future of U.S.-China relations and the global tech industry.
READ NEXT:
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
