Two Chinese nationals have been arrested for allegedly exporting sensitive microchips used in artificial intelligence (AI) to China, violating U.S. export control laws, the Department of Justice announced Tuesday. Chuan Geng and Shiwei Yang, both 28, operated ALX Solutions Inc., which they allegedly used to illegally export high-performance graphic processing units (GPUs) without the required licenses from the U.S. Department of Commerce.

According to federal authorities, Geng voluntarily surrendered over the weekend, while Yang was arrested the same day. One of the men was in the U.S. unlawfully. The DOJ stated that ALX Solutions was formed shortly after new export restrictions were introduced for advanced AI chips, suggesting the company was created to bypass those controls.

The defendants allegedly routed at least 21 GPU shipments through freight-forwarding firms in Singapore and Malaysia—common transshipment points used to obscure final destinations like China. Although ALX Solutions claimed to ship to companies in these countries, it reportedly received no payments from them. Instead, it received significant funds from firms in China and Hong Kong, including a \$1 million payment in January 2024.

In one case, prosecutors say the company falsely declared the export of AI GPUs in December 2024 without securing the proper export license. The DOJ described the chips as “the most powerful GPU chip on the market,” specifically designed for AI applications such as self-driving cars and medical systems.

A federal search of ALX’s office revealed communications between the defendants discussing ways to evade U.S. export laws, including rerouting shipments through Malaysia to avoid detection.