The U.S. Department of Justice has indicted the founder of Bitworks for illegally reselling advanced NVIDIA chips to China.

The U.S. Department of Justice has accused an entrepreneur who claims to be a partner of NVIDIA in the cloud of illegally reselling NVIDIA's top-tier AI chips and HP supercomputers to China through a third party. According to Forbes, the Department of Justice specifically pointed out in the indictment that Beijing is using AI to design militarized weapons, including “weapons of mass destruction” and “advanced artificial intelligence surveillance tools.” This case involves national security crises, transnational forgery, and smuggling, raising significant concerns in the U.S. political and tech circles.

Core figures and international smuggling networks exposed

The indictment states that Brian Raymond, the founder of the artificial intelligence infrastructure company Bitworks located in Huntsville, Alabama, along with three other men, conspired to sell restricted chips to a China-based company registered in Hong Kong. Brian Raymond's accomplices include two Chinese nationals and an American citizen born in Hong Kong. The U.S. Department of Justice reported that this international smuggling ring sold as many as 350 high-end NVIDIA GPUs and ten HP supercomputers to Chinese buyers, generating approximately $4 million in profits. The case was initially revealed by the independent media outlet Court Watch, which subsequently caused a stir in the U.S. tech industry and political arena.

Raymond claims to be a partner of NVIDIA Cloud.

Raymond's LinkedIn profile shows that he claims to be a “cloud partner” at NVIDIA, assisting in the sales of servers and GPUs to clients including AI startups and national laboratories. He also labels himself as the Chief Technology Officer of the AI cloud company Corvex. However, Corvex responded to the media stating that Raymond has not officially joined the company and has withdrawn the job offer, indicating that the case has directly impacted his career.

The Ministry of Justice reveals methods of transnational smuggling and document forgery.

The other three defendants in the same case, Hon Ning Ho, Cham Li, and Jing Chen, are accused of being responsible for identifying customers in China who needed NVIDIA GPUs. They obtained products from Raymond and filled out false information on shipping documents to conceal the contents and destination of the products. The Department of Justice stated that the four discussed transshipping through a third country to evade export controls while collaborating with individuals from Malaysia and Thailand, allowing the chips to ultimately flow into China. Payments were funneled through a shell real estate company, Janford Realtor, in Florida or directly from Chinese companies to Raymond's account. In August of this year, two Chinese nationals were also indicted by the Department of Justice for a similar scheme, using Singapore and Malaysia as routes into Beijing. According to the U.S. Department of Justice, they obtained up to $30 million in revenue through illegal smuggling.

Under export restriction policies, high-end chips are still being resold to China.

As early as 2022, when the Biden administration was in power, the U.S. required all high-end chip manufacturers selling artificial intelligence and supercomputers to obtain export licenses issued by the Bureau of Industry and Security. This policy has made it nearly impossible for all of NVIDIA's most advanced chips to be legally exported to China. However, according to the indictment, high-end chips, including models such as H 100, H 200, and A 100, have still found their way into China. These GPUs are critical in the fields of artificial intelligence training and high-performance computing and are products that the U.S. government strictly prohibits from export. Even though the U.S. has long enforced export controls on advanced chips, the Department of Justice stated that illegal transactions have continued from 2023 to this year, indicating that despite the strict policy, there are still loopholes that can be exploited.

NVIDIA's response emphasizes that it will not provide technical support for smuggled chips.

NVIDIA spokesperson John Rizzo stated that AI data centers are large and complex systems, and any illegal importation carries extremely high risks. NVIDIA will not provide repair and technical support for products subject to export restrictions. This response highlights NVIDIA's compliance with official export policies and its strong denial of the illegal market.

Restricting the export of Nvidia chips to China has long been a core policy of the U.S. government, aimed at preventing China from developing strategically important artificial intelligence models. In April this year, the Trump administration even suspended the export of H20 chips, a product specifically designed to meet U.S. restrictions. Nvidia CEO Jensen Huang had lobbied Trump to ease export restrictions, and some results emerged in August: Trump announced that lower-performance chips could be re-exported, but Nvidia would have to pay a 15% revenue tax in exchange.

Forbes was unable to reach Raymond or any of the defendants' lawyers, all of whom have pleaded not guilty and will be presumed innocent until proven guilty. The Department of Justice declined to comment on the case. Bitworks also did not respond to requests for comment.

This article reports that the U.S. Department of Justice has charged the founder of Bitworks with illegally reselling high-end Nvidia chips to China, originally appearing in Chain News ABMedia.