"Ever heard of a chipmaker called "SANDKYAN?" No? That's because it doesn't exist - it was the fake company name involved in what US authorities are saying was a "sophisticated" AI chip-smuggling operation. On Monday, prosecutors announced they havearrested severalparties in connection with an operation that involved smuggling Nvidia's most advanced AI chips to China and Hong Kong in violation of US export control laws. Among those areFanyue "Tom" Gong, a 43-year-old tech-company owner in New York, and Benlin Yuan, a 58-year-old Canadian executive."
"The Nvidiachips, known as GPUs, are used to train cutting-edge AI models and high-performance computing systems. They are tightly restricted due to their potential military applications. "These chips are the building blocks of AI superiority and are integral to modern military applications," said US Attorney Nicholas Ganjei for the Southern District of Texas, adding that the smuggling operation threatened national security."
"The arrests follow a wider probe that seized $50 million in smuggled GPUs and cash. Yuan's lawyer told Business Insider he had no comment about the cases. A representative for Gong could not immediately be identified. An Nvidia spokesperson told Business Insider that the export system is "rigorous and comprehensive" and that it will "continue to work with the government and our customers to ensure that second-hand smuggling does not occur.""
US prosecutors arrested individuals tied to a network that relabeled Nvidia GPUs as "SANDKYAN" to export advanced AI chips to China and Hong Kong in violation of U.S. export controls. The GPUs are used to train advanced AI models and support high-performance computing and are restricted because of potential military applications. Investigators seized roughly $50 million in smuggled GPUs and cash during a broader probe. Named arrests included Fanyue "Tom" Gong and Benlin Yuan with arrest dates in late November and early December. Nvidia described its export system as rigorous and pledged cooperation to prevent second‑hand smuggling.
Read at Business Insider
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