Federal authorities in Texas intercepted a massive shipment of NVIDIA GPUs destined for China this week. The haul, valued at over $50 million, violated strict US export laws. Agents also arrested two businesspeople—including the owner of a Houston-based company—accusing them of running a smuggling ring to ship high-tech hardware used to train artificial intelligence models.
US Attorney Nicholas J. Ganjei described “Operation Gatekeeper” as a major win for national security. He noted that the network funneled cutting-edge tech to groups that could use it against American interests. Investigators spent over a year tracking the group, uncovering plans to export at least $160 million worth of NVIDIA H100 and H200 GPUs.
The smuggling scheme relied on heavy deception. The accused allegedly used falsified shipping documents, misclassified the goods to hide their true nature, and utilized “straw purchasers” to buy the chips indirectly. In some cases, they even peeled the NVIDIA labels off the hardware to sneak it past customs into mainland China and Hong Kong. If convicted, the men face 10 to 20 years in prison.
The seized H200 chips offer significantly more power than the H20 model, which NVIDIA originally designed to meet US export limits. Interestingly, production of the weaker H20 reportedly stopped right after the Trump administration announced a new revenue-sharing deal with NVIDIA today. This agreement allows the company to sell the powerful H200s to specific “approved customers” in China. Following this shift, China has started pushing local companies to stop buying the now-defunct H20.
These black-market sales highlight the intense pressure of the global AI arms race. While the US government still bans the export of NVIDIA’s top-tier Blackwell chips to maintain a technological edge, smugglers continue to try to bypass the rules to feed the overseas demand.
