U.S. DOJ targets export violations as Nvidia rejects “kill switch” proposals
High-performance chips at the center of the case
The U.S. Department of Justice (DOJ) has charged two Chinese nationals, Chuan Geng and Shiwei Yang, with allegedly smuggling tens of millions of dollars’ worth of AI chips to China in violation of the Export Control Reform Act. The arrests took place in California on August 2, and each count carries a maximum penalty of 20 years in prison.
Prosecutors allege the two operated through their California-based firm, ALX Solutions, shipping sensitive technologies — including advanced GPUs — to Singapore and Malaysia as intermediaries before payments arrived from Hong Kong and China. The DOJ says internal communications revealed deliberate efforts to bypass U.S. export restrictions.
Nvidia’s chips likely involved
While the DOJ didn’t name the manufacturer, the complaint describes the hardware as “the most powerful chip in the market” for AI applications — a description that aligns with Nvidia’s H100 GPUs. Reuters also reported the H100s as the suspected chips.
Nvidia, in a statement, emphasized that it sells primarily to vetted partners and enforces strict export compliance.
“Even relatively small exporters and shipments are subject to thorough review,” the company said, adding that diverted products receive no service, support, or updates.
The policy debate: tracking chips vs. security risks
The arrests come amid ongoing U.S. efforts to balance AI innovation with national security. The Trump administration’s recent AI Action Plan reinforced the need for strong export controls but offered limited specifics.
One floated proposal is embedding tracking technology or kill switches in chips to help identify smuggling routes. However, Nvidia strongly opposes such measures. In a blog post, the company argued that built-in backdoors would be a cybersecurity risk, inviting exploitation by hackers and eroding trust in U.S. technology.
“Embedding backdoors and kill switches into chips would be a gift to hackers… It’s an overreaction that would irreparably harm America’s economic and national security interests,” the post read.
What’s next
The case underscores the U.S. government’s resolve to enforce export compliance in the high-stakes AI race, particularly against China. It also highlights the friction between regulatory enforcement and industry resistance to intrusive hardware controls — a tension that will likely intensify as AI chips remain a focal point of geopolitical competition.
