
High-Tech Heist: $160 Million in AI Chips Nearly Smuggled to China
A daring smuggling operation targeting $160 million in advanced Nvidia AI chips was thwarted by federal investigators, exposing the high-stakes global technology race between the United States and China.
In a daring tale of technological espionage, federal investigators recently uncovered a sophisticated smuggling operation targeting some of the world's most advanced artificial intelligence hardware. Operation Gatekeeper, a meticulous federal investigation, exposed an underground network attempting to illegally export sophisticated Nvidia graphics processing units (GPUs) into China, revealing the intense global competition for cutting-edge technological supremacy.
The elaborate scheme centered on smuggling at least $160 million worth of high-performance H100 and H200 chips between October 2024 and May 2025, highlighting the extraordinary demand for American-made AI technology. An undercover agent penetrated a New Jersey warehouse where conspirators were allegedly rebranding these chips under a fake company name 'Sandkayan' and mislabeling shipping documents as mundane 'adapters' and 'contactor controllers'.
Technology analyst Ray Wang provided critical context, noting that over 60% of China's leading AI models currently rely on Nvidia hardware. Despite China's efforts to develop a domestic chip market, the country remains significantly dependent on American technological innovation. 'Nvidia have a systematic advantage ranging from hardware to software,' Wang explained, underscoring the strategic importance of these chips.
The smuggling operation reached a dramatic climax on May 28, when three trucks arrived at the Secaucus warehouse to collect the illicit cargo. Just moments before potential transportation, law enforcement intervention disrupted the plan. Text messages between conspirators revealed a panicked attempt to destroy evidence, with one participant urgently instructing the group to 'Dissolve this group chat. Delete everyone.'
This case is part of a broader trend, with the Center for a New American Security estimating that between 10,000 and several hundred thousand AI chips were smuggled to China in 2024 alone. Nvidia maintains that their export controls are rigorous, with a company spokesperson emphasizing comprehensive scrutiny even for secondary market sales.
The investigation reveals not just a criminal enterprise, but a complex geopolitical chess match where advanced technology has become a critical national security asset. As global powers compete for technological supremacy, Operation Gatekeeper stands as a testament to the United States' commitment to protecting its most valuable technological innovations.
Based on reporting by CNBC
This story was written by BrightWire based on verified news reports.
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