Two more men have been apprehended for allegedly violating export control laws regarding the supply of Nvidia H100 and H200 AI chips to China, reports Bloomberg. The DOJ already had a Houston business owner in its back pocket who had pleaded guilty to its charges. Now two fresh scalps, one based in New York and another in Ontario, are facing heat for allegedly facilitating this high-tech smuggling operation.
The smuggling gang’s ruse was as follows: shipping labels on Nvidia H100 and H200 AI chip cartons/packages/pallets were changed to bear the name of a fictional brand, ‘Sandkyan.’ The troublesome trio was then alleged to have collaborated with employees from both a Hong Kong-based shipping company and a China-based AI tech company to slyly ease the forbidden cargo through U.S. export controls.
Arrests come as U.S. relaxes Hopper-for-China restrictions
Strict AI tech export rules have reportedly cost Nvidia billions in revenue, but the Trump administration has recently extended an olive branch to the company by relaxing export controls somewhat. In brief, Hopper-architecture chips like H100 and H200 are now ‘last generation,’ with Blackwell chips currently the desirable choice of AI data centers, and another generational upgrade planned for 2026. Thus, the US government reckons that giving China access to older (late 2022) chips like Hopper won’t adversely impact American technical superiority.
This easing of AI chip export rules is good news for Nvidia, which has lobbied for allowing China unrestricted access to its products. Its CEO, Jensen Huang, has long argued that letting Nvidia become the established default AI chip choice worldwide would create an unassailable American technology stack.
Throughout 2025, we have seen Nvidia’s established lead being eaten away by Chinese tech initiatives, very likely inspired by export restriction pressures. It remains to be seen how big an appetite the Chinese have for chips like H200 as we approach 2026. It will depend on how much China boasts about its homegrown AI technologies are really vaporware and/or wishful thinking.
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