Washington: The US Department of Justice has announced the arrest of two Chinese nationals, Chuan Geng and Shiwei Yang, for allegedly exporting sensitive microchips used in artificial intelligence (AI) applications to China without the necessary licenses.

According to Anadolu Agency, the Justice Department's statement revealed that Geng and Yang exported "tens of millions of dollars" worth of sensitive microchips through their company, ALX Solutions, based in El Monte. The exports were conducted without the required licenses from the Department of Commerce between October 2022 and July 2025.

The statement detailed that ALX Solutions managed to send the microchips in over 20 shipments across a span of three years to logistics firms located in Malaysia and Singapore. These shipments were subsequently transferred to China, bypassing the requisite legal channels.

Furthermore, the statement noted a peculiar financial arrangement where ALX Solutions did not receive payments directly from the entities to which the goods were reportedly exported. Instead, the company received multiple payments from companies based in Hong Kong and China, including a significant $1 million payment from a China-based company in January 2024.

Geng and Yang face serious charges under the Export Control Reform Act, a felony that could result in a maximum penalty of 20 years in prison if convicted.