On March 26, 2026, the U.S. Justice Department announced the arrest of Hong Kong resident Stanley Yi Zheng and two U.S. citizens for conspiring to smuggle millions of dollars’ worth of restricted Nvidia AI chips to China. The suspects used a Thailand-based intermediary to bypass U.S. export controls on advanced AI processors.
Key details of the case include:
- Suspects: Stanley Yi Zheng (Hong Kong national), Matthew Kelly (New York), and Tommy Shad English (Georgia) were charged with smuggling and export violations.
- The Scheme: The trio allegedly sought to divert AI chips from a California company via Thailand to China, starting around May 2023.
- Targeted Technology: The shipments reportedly included advanced Nvidia A100 and H100 GPU chips, which are restricted due to U.S. national security regulations.
- Investigation: The FBI and other federal agencies investigated the case, which represents an ongoing effort to prevent illegal technology transfers
The US has disclosed a new Nvidia chip-smuggling case that also seems to involve San Jose-based server manufacturer Supermicro. It comes days after a Supermicro co-founder was arrested in a separate investigation, but in this instance, it looks like Nvidia and Supermicro played a role in foiling the attempted smuggling.
The Justice Department today announced it had charged three suspects, one Chinese national from Hong Kong and two US citizens, for trying to smuggle the export-controlled chips to China using pass-through companies in Thailand. The 56-year-old Chinese national, Stanley Yi Zheng, allegedly began conspiring with Americans Matthew Kelly and Tommy Shad English about smuggling the chips to China in May 2023.
The DOJ did not name Nvidia or Supermicro in the announcement or the criminal complaint. But the 41-page criminal complaint references the trio attempting to smuggle hundreds of Nvidia A100 and H100 chips. The official announcement of the charges also includes screenshots of messages the suspects sent that also mention the enterprise GPUs.
(Credit: DOJ)
In addition, the criminal complaint says the three suspects attempted to buy the Nvidia GPUs from a “computer hardware and services company” based in San Jose. A screenshot shows that Zheng allegedly sent a purchase order for 232 server units of a model dubbed “SYS-821GE-TNHR,” a Supermicro product that supports Nvidia H100 and H200 GPUs. The total cost of the purchase order was nearly $62 million.
(Credit: DOJ)
The complaint adds that a tipster notified federal investigators about the scheme in January 2024. Last month, federal agents seized the phone and laptop of US suspect Matthew Kelly when he returned to the US from Italy, giving them a way to view WhatsApp messages between the three suspects.
Nvidia and Supermicro didn’t immediately respond to a request for comment. But the complaint indicates that federal officials contacted both companies during the investigation. It also suggests that employees from Nvidia and Supermicro noticed something was off with the order requests and canceled them early in 2024. A second attempt was made to buy the chips in April 2024, but that too “ultimately was unsuccessful,” according to federal investigators.
“China is an embargoed country restricted by the US government. US companies are restricted from selling to businesses or end users headquartered in China,” Supermicro, identified as “Company-1” appears to have told the suspects at one point. All three suspects are now in US custody.
The case emerges amid growing concerns that China continues to find ways to obtain cutting-edge AI chips despite US export controls. The investigation involving Supermicro co-founder Wally Liaw focused on the company selling $2.5 billion worth of servers to another pass-through company in Southeast Asia, which then sent the units to China. Liaw was arrested last week, but not before he was spotted posing for a picture with Nvidia CEO Jensen Huang.
In response to that case, Nvidia told PCMag: “Strict compliance is a top priority for Nvidia. We continue to work closely with our customers and the government on compliance programs as export regulations have expanded. Unlawful diversion of controlled US computers to China is a losing proposition across the board—Nvidia does not provide any service or support for such systems, and the enforcement mechanisms are rigorous and effective.”
Still, two US senators, Jim Banks (R-Ind.) and Elizabeth Warren (D-Mass.) have called on the Commerce Department to suspend Nvidia’s export licenses to ship the advanced GPUs to Asian markets over fears the hardware will be rerouted to mainland China. “I want a freeze to Nvidia’s export licenses until it takes our national security seriously,” Sen. Warren tweeted.
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