Federal prosecutors just dropped the hammer on four men accused of smuggling millions of dollars worth of Nvidia's most powerful AI chips to China and Hong Kong. The indictment unsealed Thursday reveals a sophisticated operation that routed 400 A100 chips through Malaysia and Thailand to dodge U.S. export restrictions - exactly the kind of scheme Washington has been scrambling to prevent as the AI arms race intensifies.
The federal case reads like a tech thriller, but the implications are deadly serious for both Nvidia and the broader AI industry. Four men now face up to 20 years in prison for what prosecutors describe as a multi-million dollar conspiracy to funnel America's most advanced AI chips directly into Chinese hands.
Brian Curtis Raymond, the 46-year-old Alabama businessman at the center of the scheme, was literally days away from becoming CTO of AI cloud company Corvex when federal agents knocked on his door Wednesday. His company Bitworks had legitimate authorization to sell Nvidia GPUs, but prosecutors allege he used that access to orchestrate something far more sinister.
The numbers are staggering. Between October 2024 and January, the group successfully shipped 400 Nvidia A100 chips to China in two separate operations, routing them through Malaysia and Thailand to mask their final destination. Law enforcement managed to disrupt the third and fourth shipments, which would have included 10 Hewlett Packard Enterprise supercomputers packed with H100 GPUs and 50 separate H200 chips.
"These capabilities are being used by the PRC for its military modernization efforts and in connection with weapons design and testing, including for weapons of mass destruction," the federal indictment states bluntly. It's exactly the scenario that prompted the Biden administration to tighten export controls on AI chips in the first place.
The scheme operated through a Tampa company called Janford Realtor, which despite its name never touched real estate. Instead, prosecutors say it served as a front for routing restricted chips to Chinese buyers. Mathew Ho, a 34-year-old Hong Kong-born U.S. citizen, allegedly ran the company while coordinating with customers in China who wanted to buy Nvidia's most powerful processors.
What makes this case particularly striking is how it exposes the vulnerabilities in America's export control system. Raymond had legitimate credentials - his LinkedIn profile boasted that Bitworks was a "Nvidia Cloud Partner delivering H100, H200, and coming Blackwell clusters for customers." That legitimate access became the perfect cover for illegal exports.
