Texas authorities have made multiple arrests in an NVIDIA GPU smuggling operation

Texas authorities have uncovered a sophisticated smuggling operation involving the illegal export of over $50 million worth of NVIDIA GPUs to China. The investigation, known as "Operation Gatekeeper," has led to the arrest of two businessmen, including the owner of a Houston company, who are accused of using a combination of falsified paperwork, misclassified goods, straw purchasers, and even removing NVIDIA labels to ship the GPUs to both mainland China and Hong Kong. The smuggled GPUs include the powerful H100 and H200 models, which are critical for training and running AI models. The Trump administration had previously announced a revenue-sharing agreement with NVIDIA, allowing the company to sell the H200 chips to "approved customers" in China. However, the smuggling operation sought to bypass these export restrictions, posing a threat to the nation's security by funneling cutting-edge AI technology to those who could use it against American interests. The conspirators face between 10 and 20 years in prison if convicted. This case highlights the ongoing battle against illicit sales of AI technology to China, as both nations compete for dominance in this critical field.