By Magdalena Petrova,Eamon Javers
Publication Date: 2025-12-31 12:00:00
On Dec. 8, Federal prosecutors in Texas unsealed documents that revealed an investigation into a massive smuggling network that stretched across the U.S. and the world.
Dubbed “Operation Gatekeeper” by the feds, the investigation wasn’t focused on drug smuggling or stolen goods but rather an alleged secret, underground network of suppliers for Nvidia‘s graphic processing units, or GPUs. Such chips are the backbone of the AI race, and can be used for military or civilian purposes.
The government said a hidden smuggling ring was sending chips to China in defiance of American national security export control laws. The smuggling syndicate allegedly involved operatives illegally entering the United States, phony front companies and a secret warehouse shipping operation in New Jersey that was penetrated by at least one undercover agent working on behalf of the U.S. government.
What that federal investigation found showcases the desperate struggle between the United States and China for access to cutting-edge chips that many believe will control the fate of the global economy. The smuggling ring, they said, attempted to export at least $160 million worth of Nvidia H100 and H200 GPUs to China between October 2024 and May 2025.
The demand for these chips from China is enormous, and the best supply is still in the United States. Although China is establishing its own local AI chip market, the county remains highly dependent on Nvidia’s technology.
“I think more than 60% of the…
