Short answer: Recent U.S. and Taiwan investigations show repeated alleged attempts to divert NVIDIA AI GPUs and servers containing advanced chips to China. They do not, however, establish that smuggling is increasing year over year: the public record reviewed here contains no comparable annual totals for cases, chips, or dollar value. It shows active enforcement and sophisticated alleged evasion methods, not a verified trend line.
What the public evidence can—and cannot—prove
The phrase “getting worse” implies a measurable increase. The available announcements and reporting do not provide a consistent series of annual case counts, quantities, or values, so no responsible statistic can show that NVIDIA-chip smuggling is rising over time. Each dollar figure below belongs to a particular investigation; none is an estimate of the global market for illegally diverted chips.
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The cases do establish recurring alleged tactics: inaccurate end-user or shipping paperwork, shell or pass-through buyers, relabeling, and routing through third countries. They also show that authorities are pursuing both individual GPUs and complete servers. NVIDIA itself is not identified as a defendant in the cited releases.
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| Announcement or report | Goods and alleged route | Alleged conduct | Status and stated value |
|---|---|---|---|
| DOJ Operation Gatekeeper, December 9, 2025; guilty plea announced October 10, 2025 | H100 and H200 GPUs | False descriptions and recipients, straw purchasers, intermediaries, and relabeling in U.S. warehouses under the fictitious name “SANDKYAN” | DOJ says at least $160 million was exported or attempted to be exported from October 2024 through May 2025. Alan Hao Hsu and Hao Global LLC pleaded guilty. DOJ reported more than $50 million in NVIDIA technology and cash seized across the investigation. |
| DOJ charges, August 5, 2025 | Sensitive GPUs allegedly moved from the United States toward China through Singapore and Malaysia | Use of transshipment points to conceal the ultimate destination | Charges are allegations; defendants are presumed innocent. |
| DOJ charges, March 25, 2026 | Controlled servers planned for shipment through Thailand to China | Proposed purchases and routing intended to obtain restricted technology | The release says the proposed purchases were unsuccessful. The charges remain allegations. |
| Associated Press report, May 21, 2026 | Servers containing NVIDIA chips in Taiwan | Allegedly false export declarations | Taiwan prosecutors were investigating three unidentified people; no outcome was reported in the cited account. |
| DOJ indictment, October 1, 2026 | Servers containing advanced GPUs, allegedly routed through Malaysia and Singapore; one described shipment contained 27 servers sent from Los Angeles to Kuala Lumpur | Alleged transshipment and concealment of a China-based buyer | The indictment attributes more than $300 million in servers to the alleged scheme. DOJ values the 27-server order at about $7.614 million. An indictment is an allegation, not a finding of guilt. |
Why the legal distinctions matter
A guilty plea is an admission and a court outcome; it is different from an arrest, criminal complaint, or indictment. In the Gatekeeper matter, DOJ says Hsu and his company pleaded guilty, while its descriptions of other participants remain allegations. The October 2026 case concerns an indictment of Greg Lui, so the conduct described there has not been proven in court.
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How the alleged diversion schemes worked
False descriptions and end users
Investigators allege that paperwork misstated what was being shipped or who would receive it. Such documents can make a controlled GPU or server appear to be an ordinary commercial shipment and obscure the actual customer.
Straw purchasers and intermediaries
Authorities describe buyers or front companies that stood between the exporter and the eventual user. The separation makes a transaction look like a sale to an apparently acceptable customer while the technology is directed elsewhere.
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Relabeling inside the United States
The Gatekeeper release alleges that GPUs were relabeled in U.S. warehouses with the fictitious name “SANDKYAN.” Relabeling can frustrate checks that compare warehouse inventory, invoices, and declared recipients.
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Third-country transshipment
Several allegations involve Singapore, Malaysia, or Thailand rather than a direct United States-to-China shipment. A server can leave the United States with an intermediate destination and then be re-exported, making the final recipient harder to detect. The Taiwan investigation shows that authorities are also examining declarations made in a major regional electronics hub.
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Are H100 and H200 chips allowed to be exported to China?
There is no single answer for every product, date, exporter, and transaction. The applicable U.S. export-control rules and any required license govern each shipment. A company should not treat an intermediate country, a new customer, or a different server configuration as automatic authorization.
On January 13, 2026, the Bureau of Industry and Security announced that applications for NVIDIA H200, AMD MI325X, and similar chips would receive case-by-case review if specified safeguards were met. BIS said the export must not reduce semiconductor capacity available to U.S. customers; the Chinese purchaser must maintain export-compliance procedures, including customer screening; and an independent third party in the United States must test performance and security. That announcement was conditional licensing policy, not blanket permission.
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Earlier, on January 15, 2025, BIS announced expanded license requirements for certain advanced-computing semiconductors and additional due diligence and reporting for foundries and packaging companies serving newer customers considered at heightened diversion risk. The announcement described an effort to close circumvention routes; the precise rule text and current requirements still control a particular transaction.
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FBI Assistant Director Roman Rozhavsky characterized Operation Gatekeeper this way: “Gong and his accomplices allegedly led a complex scheme to smuggle high-performance graphic processing units to China in violation of U.S. export laws.” The word “allegedly” reflects the procedural status of the people charged, not a judicial finding about every participant.
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Regarding the 2026 licensing policy, Commerce Under Secretary for Industry and Security Jeffrey Kessler said: “Export controls should evolve with changes in technology, while protecting national security.” The statement explains why licensing policy can change as chip performance and diversion risks change; it does not determine whether a specific shipment is lawful.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does the evidence show a worsening problem?
It shows a persistent enforcement challenge with varied routes and concealment techniques. It does not show how many chips evade controls successfully, how many attempts occur each year, or whether the total value is increasing. Publicly announced cases are also a biased sample: they reflect investigations authorities chose to disclose, not all attempted diversions.
The October 2026 indictment is larger in alleged dollar value than the specific Gatekeeper shipment figure, but comparing those two cases would not create a trend. They involve different goods, defendants, dates, and procedural stages. A genuine “getting worse” conclusion would require a defined period, consistent counting rules, and comparable totals for attempted and completed diversions.
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- Case outcomes: guilty pleas, trials, dismissals, and sentencing will separate proven conduct from allegations.
- Comparable government data: annual counts, quantities, destinations, and values reported using the same method would permit a trend assessment.
- Rule changes: BIS licensing criteria and due-diligence obligations can change as products and routes change.
- Supply-chain controls: enforcement actions involving distributors, warehouses, foundries, packaging firms, and logistics providers may reveal where screening failed.
For now, the most accurate description is narrower than the headline claim: authorities have uncovered multiple alleged attempts to divert advanced NVIDIA-based computing capacity to China, including a guilty plea in one investigation, but the public record does not establish that the overall smuggling rate is worsening.
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