Federal prosecutors say three men used a $170 million order, 750 servers, 600 limited Nvidia chips and a Thailand-based front company to most tightly controlled artificial intelligence America's, violating U.S. export law.
The Department of Justice charged Stanley Yi Zheng, 56, of Hong Kong, Matthew Kelly, 49, of Hopewell Junction, New York, and Tommy Shad English, 53, of Atlanta, Georgia, with conspiracy to commit smuggling and export control violations. The three defendants allegedly sought to obtain of computer chipsmillions of dollars worthfrom a California-based computer hardware company and then illegally ship them to China via Thailand.
Zheng was arrested on March 22, while Kelly and English were handed over to the federal authorities on March 25.
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The criminal complaint alleges the trio’s attempt to smuggle hundreds of Nvidia A100 and H100 chips — advanced GPUs that power the training and processing of large AI models. A San Jose-based hardware and services company was targeted, with the perpetrators ordering server units powered by Supermicro hardwaredesigned to support Nvidia H100 and H200 GPUs (a total value of nearly $62 million for a single shipment).
Nvidia's H100 and A100 chips are subject to U.S. Department of Commerce export controls due to their direct application in military AI, autonomous weapons systems, and the development of advanced large language models.
How the AI technology smuggling started and evolved
According to the criminal complaint, the conspiracy began in May 2023, when Zheng, Kelly and English began working together to acquire computer servers from a California manufacturer and ship them to Thailand with an ultimate destination in China. They used the names of Thai-based companies as the purported buyers of the servers, while their real intention was to ship the American AI chips to China.
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In October 2023, English, believed to be acting on behalf of a Thailand-based company, ordered 750 computer servers for approximately $170 million. Of the 750 servers, 600 contained a chip that required a license to export to China.
The fraud began to unfold in January 2024, when discussing an upcoming compliance review of the October 2023 order, the English asked the manufacturer (via email) to add Zheng and Kelly to the email thread. The company noticed that Zheng's company was based in China and said it was “strange” that none of the Thai company were among those copied.
The company also commented that China is an embargoed country restricted by the US government and that US companies cannot sell to businesses or end users based in China.
An informant then tipped off federal investigators to the smuggling in January 2024. In February 2026, federal agents seized the phone and laptop of American suspect Matthew Kelly, giving investigators access to WhatsApp messages between the three suspects.
See also: US: 3 men charged with exporting AI technology to China
Nvidia and Supermicro employees also noticed anomalies in the order requests and canceled them in early 2024.
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The use of Thailand as a transit hub is a well-documented circumvention technique that has increased since the Biden administration increased export controls on advanced chips in October 2022 and October 2023.
Prosecutors allege that the AI chips, which the defendants sought to transfer to China, have military and strategic applications, making their unauthorized transfer a violation of U.S. export control laws. The A100 and H100, in particular, can train AI models for advanced weapons systems and more — capabilities that the U.S. government has explicitly sought to deny to China’s military through export restrictions.
