The US Department of Justice has charged two Chinese nationals with illegally exporting advanced semiconductors used in artificial intelligence applications to China, in a case that underscores growing efforts by Washington to restrict Beijing’s access to sensitive technology.

According to a federal complaint unsealed Tuesday, Chuan Geng and Shiwei Yang allegedly used their California-based company, ALX Solutions Inc., to ship high-performance GPUs—used in AI systems such as self-driving cars and medical diagnostic tools—to China without the required export licenses. The two are accused of violating the Export Control Reform Act, a felony that carries a maximum penalty of 20 years in prison.

The Justice Department said the pair operated through freight-forwarding hubs in Singapore and Malaysia to conceal the final destination of the shipments. While the declared recipients were based in Southeast Asia, investigators found that ALX Solutions received payments from entities in mainland China and Hong Kong, including a $1mn transfer in January 2024.

The company was founded shortly after the US Commerce Department began requiring licenses for the export of advanced chips to China. From October 2022 to July 2025, prosecutors allege ALX Solutions sent at least 21 shipments containing restricted GPUs, including one in December 2024 that was falsely labeled as compliant with federal regulations.

Geng, a US permanent resident, was released on $250,000 bond following a court appearance in Los Angeles. Yang, who allegedly overstayed her visa, remains in custody pending a detention hearing on August 12. Arraignment is scheduled for September 11. No pleas have yet been entered.

The Justice Department said it seized phones belonging to the defendants containing communications detailing efforts to evade US export rules by rerouting shipments through Malaysia. The chips in question were described as among the most powerful on the market, designed specifically for AI applications.

The case is being prosecuted by the US Attorney’s Office for the Central District of California and the Justice Department’s National Security Division. The FBI and the Department of Commerce’s Bureau of Industry and Security are leading the investigation.

The charges come amid heightened US scrutiny of outbound tech transfers, particularly in sectors deemed critical to national security. Washington has imposed sweeping export controls in recent years to curb China’s access to cutting-edge semiconductors.