The U.S. Department of Justice announced two businessmen have been arrested for their part in AI tech smuggling efforts.
The DOJ said “Operation Gatekeeper” disrupted the tech trafficking network and seized more than $50 million in advanced GPUs destined for China and other restricted locations.
“Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation’s security by funneling cutting-edge AI technology to those who would use it against American interests,” U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas said. “These chips are the building blocks of AI superiority and are integral to modern military applications. The country that controls these chips will control AI technology; the country that controls AI technology will control the future. The Southern District of Texas will aggressively prosecute anyone who attempts to compromise America’s technological edge.”
Officials said Alan Hao Hsu, also known as Haochun Hsu, 43, of Missouri City, Texas, and his company, Hao Global LLC, both pleaded guilty to smuggling and unlawful export activities on Oct. 10, 2025. Court documents indicate Hsu and others exported and attempted to export at least $160 million worth of export-controlled Nvidia H110 and H200 Tensor Core graphic processing units (the high-speed GPUs used for AI applications and high-performance computing) between October 2024 and May 2025.
The DOJ said Hsu and others falsified shipping paperwork, misclassifying the true nature of the goods and their recipients to conceal the GPUs ultimate destinations. Hsu and Hao Global received more than $50 million in wire transfers for the GPUs, which originated from China. The GPUs were ultimately shipped to the PRC, Hong Kong and other destinations in violation of U.S. export laws.
“The United States has long emphasized the importance of innovation and is responsible for an incredible amount of cutting-edge technology, such as the advanced computer chips that make modern AI possible,” Assistant Attorney General for National Security John A. Eisenberg said. “This advantage isn’t free but rather the result of our engineers’ and scientists’ hard work and sacrifice. The National Security Division, along with our partners, will vigorously enforce our export-control laws and protect this edge.”
Hsu faces up to 10 years in prison, and Hao Global LLC faces a maximum penalty of twice the gross gain from the scheme.
Federal officials also charged Benlin Yuan, 58, the chief executive officer of Sterling, VA-based IT company that is a subsidiary of a large Chinese IT company; and Fanyue Gong, also known as Tom Gong, 43, a PRC citizen residing in Brooklyn, New York, for violations of U.S. export controls and legislation.