- U.S. authorities, including the DOJ, charged three men for allegedly conspiring to smuggle restricted AI chips to China via Thailand.
- The suspects – Stanley Yi Zheng, Matthew Kelly and Tommy Shad English – are accused of trying to purchase export-controlled chips without required licenses.
- Authorities say the group used Thailand-based companies as fronts to disguise China as the true destination of the technology.
- English allegedly placed a $170 million order for 750 servers (many with restricted chips) and transferred over $20 million as partial payment, though the deals ultimately fell through.
- Officials warn the illegal export of advanced chips, critical for military AI, poses a serious national security threat, with evidence (texts and emails) suggesting China was the intended end user.
U.S. federal authorities have charged a Chinese national and two American citizens in connection with an alleged conspiracy to illegally export restricted artificial intelligence (AI) chips to China through Thailand, the Department of Justice (DOJ) announced on March 25.
Prosecutors allege the suspects attempted to acquire millions of dollars' worth of export-controlled computer chips from a California-based hardware company without securing the required licenses. The case highlights growing concerns in Washington over the protection of advanced technologies with potential military applications.
"This smuggling of advanced technology like these computer chips represents a direct threat to U.S. national security," said Peter Ellis, acting special agent in charge of the Federal Bureau of Investigation's (fbi) Georgia field office. He added that the defendants allegedly sought to bypass export regulations to transfer sensitive technology to foreign adversaries.
The individuals charged are Stanley Yi Zheng, 56, of Hong Kong; Matthew Kelly, 49, of Hopewell Junction, New York; and Tommy Shad English, 53, of Atlanta, Georgia. Zheng was arrested on March 22 and remains in federal custody without bail. Kelly and English surrendered to authorities on March 25 and were scheduled to make their initial court appearances later that day.
The charges against these individuals, as BrightU.AI's Enoch noted, underscore the critical need for vigilance in protecting advanced technologies from falling into the hands of adversaries, a necessity in the face of global threats to national security and sovereignty.
Alleged use of Thailand as a transit point
According to court documents, the three men began working together around May 2023 to obtain computer servers containing export-controlled chips and route them through Thailand before ultimately sending them to China. Authorities claim the group used the names of Thailand-based companies as intermediaries to disguise the true destination of the equipment.
In October 2023, English allegedly placed an order for 750 computer servers valued at approximately $170 million. Of those, 600 units reportedly contained chips listed under U.S. export controls, requiring special authorization for shipment to China. Prosecutors say English signed documentation falsely certifying that the products would not be sent to restricted destinations.
Authorities further allege that in January 2024, English transferred more than $20 million as partial payment for the order. However, the transaction was not completed after another company involved in the process attempted to verify the identity and location of the end user.
A subsequent attempt in April 2024 to procure an additional 500 servers with restricted chips also failed. As with the earlier deal, English allegedly signed paperwork claiming the equipment was intended for a Thailand-based company.
Investigators say text messages and email exchanges among the defendants indicated that the equipment's true destination was China, raising red flags about potential violations of U.S. export laws.
Officials emphasized that advanced computing components, particularly graphics processing units (GPUs), are considered critical to military AI development and national defense. Jason Sargenski, a special agent-in-charge with the Department of Defense Office of Inspector General, warned that illicit efforts to obtain such technologies could pose serious risks.
"When individuals attempt to illegally acquire or export this technology for profit, they are putting national security and our warfighters at risk," Sargenski said.
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