US Uncovers $160M Nvidia H100, H200 GPU Smuggling to China Amid Trump’s Export Shift

• New Jersey warehouse bust: Undercover agents seized trucks loaded with mislabeled Nvidia GPUs headed for China.

• Operation targeted high-end AI hardware vital for computing power in civilian and military applications.

• Center for a New American Security estimates 10,000 to hundreds of thousands of AI chips smuggled to China in the past year.

Nvidia H100 H200 smuggling ring busted: $160M operation exposed. Discover how U.S. agents stopped illegal exports to China fueling AI boom. Stay updated on chip trade risks today!

What is the Nvidia H100 and H200 GPU smuggling ring to China?

Nvidia H100 and H200 GPU smuggling to China involved a sophisticated operation that moved $160 million worth of restricted AI chips from U.S. facilities to Chinese buyers from October 2024 to May 2025. Federal prosecutors detailed fake companies, product relabeling as mundane electronics, and covert shipping methods. The scheme, dubbed Operation Gatekeeper, highlighted vulnerabilities in enforcing export restrictions on advanced semiconductors essential for AI development.

How did U.S. authorities bust the Nvidia GPU smugglers in New Jersey?

Federal agents infiltrated a Secaucus, New Jersey warehouse by planting an undercover operative who witnessed suspects rebranding Nvidia H100 and H200 GPUs under the fictitious “Sandkayan” label. The chips were disguised as harmless items like adapters and contactor controllers to bypass customs. On May 28, 2025, as three trucks prepared to depart, a tip about police inquiries prompted panic in the smugglers’ group chat, leading to an order to dissolve it. Agents raided the site, confiscating the cargo before export. Prosecutors note this as part of a pattern, with similar Nvidia chip seizures occurring throughout the year. The Center for a New American Security reports that 10,000 to several hundred thousand AI chips, including older Nvidia models, reached China illicitly in the prior year alone.

Frequently Asked Questions

How does China still rely on Nvidia GPUs despite U.S. export bans?

China depends heavily on Nvidia hardware for training advanced AI models, with over 60% of leading systems using Nvidia platforms, according to chip analyst Ray Wang of SemiAnalysis. Local alternatives lag due to Nvidia’s integrated hardware-software edge. Smuggling fills the gap as Beijing accelerates its AI sector.

What impact did President Trump’s announcement have on the Nvidia H100 H200 smuggling case?

On December 8, 2025, President Trump announced via Truth Social that U.S. exports of Nvidia H200 GPUs to China would resume with a 25% government cut, while advanced Blackwell and Rubin chips remain restricted. Defense attorneys cited this to challenge prosecutors’ national security claims, arguing the chips no longer pose a uniform threat.

Key Takeaways

• Scale of smuggling: $160 million in Nvidia H100 and H200 GPUs evaded controls, underscoring enforcement challenges.
• China’s AI dependency: Over 60% of top models rely on Nvidia tech despite domestic efforts, per SemiAnalysis.
• Policy shift: Trump’s export approval for H200s complicates prosecutions—monitor for increased legal scrutiny on remaining restrictions.

Conclusion

The Nvidia H100 and H200 GPU smuggling ring to China exposes the high-stakes battle over AI chip exports, with federal busts like Operation Gatekeeper revealing intricate evasion tactics. As analysts like Ray Wang note, China’s AI ambitions persist amid reliance on smuggled Nvidia hardware, even as policy pivots under Trump open select pathways. Investors and tech watchers should track evolving U.S.-China semiconductor tensions for broader market implications in AI and computing sectors.

U.S. export controls on advanced GPUs aim to curb military applications, yet civilian demand drives illicit trade. Nvidia’s spokesperson emphasized ongoing collaboration with authorities to prevent secondary-market diversions, stating that millions of controlled GPUs serve legitimate users worldwide. This case, involving arrests and guilty pleas from figures in Houston, signals intensified crackdowns but also highlights smuggling resilience.

SemiAnalysis expert Ray Wang underscored tracking difficulties: “There are so many ways to acquire Nvidia chips illegally, from global data centers to shell companies.” Despite Beijing’s local chip initiatives, Nvidia’s ecosystem dominance endures. The prosecutorial narrative faced disruption from Trump’s H200 approval, prompting defense filings that question the chips’ threat level.

Broader context reveals surging global compute needs, with China’s AI market mirroring the trend. While older chip lines contribute to smuggling volumes, new H100 and H200 models represent premium targets due to their AI training prowess. Federal efforts continue, but experts predict sustained underground flows until supply aligns with demand.