FBI Indicts Three for Smuggling AI Chips to China: $170 Million in Nvidia GPUs Transshipped Through Thailand, Two U.S. Citizens Involved

The FBI announced on March 25 that the U.S. Department of Justice has filed charges in a large-scale AI chip smuggling case. According to the DOJ statement, Chinese citizen Stanley Yi Zheng and two U.S. citizens, Matthew Kelly and Tommy Shad English, are accused of conspiracy to smuggle and violations of export control laws, allegedly attempting to illegally export tens of millions of dollars worth of controlled AI chips through Thailand to China.

750 Servers, $170 Million, 600 Controlled Chips

According to court documents, the case began in May 2023, when the three defendants conspired to purchase servers from a California computer hardware company (Company-1), placing orders under a Thai company’s name, with the actual destination being China.

In October 2023, English ordered 750 servers from Company-1 under the Thai company’s name, totaling about $170 million. Of these, 600 servers contained chips regulated under the U.S. Commerce Control List, which require a special license to export to China. At the time of the order, English signed an “Advanced Computing Certification,” declaring that the servers’ destination was not China.

By January 2024, English had prepaid over $20 million. However, during compliance review, the supplier discovered Zheng’s company was registered in China, and none of the recipients listed in the order copy were Thai personnel—raising suspicion and ultimately exposing the entire scheme.

Thailand as a Common Transit Hub, FBI Highlights Systematic Patterns

Roman Rozhavsky, Assistant Director of the FBI Counterintelligence and Spying Division, stated: “As foreign adversaries accelerate their efforts to dominate the AI field, we see them increasingly resorting to bold illegal methods to acquire U.S. technology.”

Analysts point out that using Thailand as a transit point is a common tactic in such cases, indicating this is not an isolated individual act but part of a systematic scheme to circumvent export controls, recurring in multiple cases.

Chip Export Controls Become a Frontline in U.S.-China Tech War

This case contrasts with another event happening at the same time: the founder of China’s AI startup Manus was also restricted from leaving China this week while undergoing review for Meta’s acquisition. Both cases involve tightening the boundaries of AI technology flow, but in opposite directions.

NVIDIA GPUs have become the core infrastructure for modern AI development and military applications. The purpose of U.S. export controls is to slow China’s progress in AI capabilities, but this case shows that whenever export boundaries are established, some attempt to breach them through gray areas.

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