U.S. policy around AI chip exports to China faces new scrutiny as prosecutors take aim at illegal shipments, while the White House considers easing restrictions. As technology becomes tightly interwoven with concerns over trade and national security, the definitions of legal and illegal business practices blur in the international marketplace. Companies working in the high-performance AI chip sector, such as NVIDIA, AMD, and Intel, are caught between evolving rules, shifting political priorities, and increased attention from enforcement agencies. Efforts on both sides of the Pacific reflect the complex interplay of commercial ambitions, geopolitical rivalry, and domestic regulations, impacting the global supply chain of advanced AI hardware.
Enforcement actions addressing the illegal export of AI technology to China have deepened over the past two years. Public records show that previous cases often centered on sanctions and export rules violations tied to less advanced hardware or broader technology categories. The latest U.S. prosecutions, however, specifically mention NVIDIA H100 and H200 Tensor Core GPUs, marking a shift in both the value and sensitivity attributed to these products. Efforts to slow China’s access to high-end AI chips have intensified as technological competition grows more acute, with law enforcement increasingly focused on clandestine trade routes, shell companies, and false documentation to circumvent export restrictions. The policy debate over export controls, meanwhile, has become more closely linked to national security narratives than before.
How Did Hao Global Facilitate AI Chip Exports?
Federal prosecutors announced a guilty plea from Alan Hao Hsu and his company Hao Global for orchestrating a scheme that moved advanced NVIDIA chips valued at $160 million to Chinese businesses. Between October 2024 and May 2025, Hao Global exported or attempted to export over 7,000 NVIDIA H100 and H200 GPUs, using false shipping labels and shell companies. These chips, essential for large-scale AI workloads, were supposed to reach destinations in the United States, Malaysia, and Thailand, but were ultimately routed to China and Hong Kong under falsified documents.
What Legal Challenges Do Offenders Face?
Individuals involved in these illegal transactions confront severe penalties. In Hsu’s case, prosecutors emphasized the implications not only for his business but also for his personal immigration status, as the plea agreement indicates potential denaturalization and deportation. Other accused parties include Fanyue Gong and Benlin Yuan, who allegedly provided logistical and financial support through firms based in New York and Virginia. Prosecutors maintain that such acts undermine national security and that the Department of Justice is steadfast in pursuing violations regardless of future policy changes.
“Even if the White House later decides to loosen restrictions, the DOJ still has an obligation to prosecute violations of the laws as they existed,”
said Elly Rostoum, a senior fellow and former National Security Council staffer.
Does Policy on AI Chips Undercut Prosecution Efforts?
The current policy debate complicates these prosecutions. On the same day as federal charges were announced, President Trump publicly informed Chinese President Xi Jinping of potential new allowances for NVIDIA to sell H200 chips to China, alongside similar rules for AMD and Intel. The announcement drew criticism from Congressional Democrats who warned that such a move might erode the U.S.’s technological edge and benefit competitors. Senate Democrats voiced concerns that AI chip access has been a principal barrier for Chinese firms attempting to rival U.S. AI advancements.
“With this decision, President Trump is poised to remove that barrier,”
they said in a joint statement.
Other concerns focus on the logistical difficulties in enforcing export controls, particularly with ongoing illegal smuggling operations. Investigators from the Department of Commerce’s Bureau of Industry and Security noted that their resources are often insufficient relative to the value and volume of high-end AI components they aim to regulate. Meanwhile, Chinese officials are reportedly exploring their own limitations on domestic access to imported NVIDIA chips, underscoring broader international efforts to control the distribution of advanced semiconductors.
The U.S. strategy surrounding high-performance AI chips is in flux, balancing the pursuit of short-term commercial gains with longer-term security objectives. Businesses operating in this sector must carefully track evolving legal and regulatory frameworks, as infractions carry significant legal, financial, and reputational risks regardless of future policy shifts. The recent focus on NVIDIA H100 and H200 chips, alongside high-profile prosecutions and policy disagreements, highlights the challenges in tightly regulating high-value technologies on the global stage. Readers interested in the semiconductor industry or U.S.-China trade relations should monitor not only legislative and executive policy but also enforcement trends and market responses, as these may shape future supply chains and international competitiveness in the AI sector.
