(Reuters) -Two Chinese nationals in California were arrested and charged with illegally shipping tens of millions of dollars' worth of AI chips to China, including Nvidia H100s, the U.S. Justice Department said on Tuesday.

Chuan Geng, 28, of Pasadena, and Shiwei Yang, 28, of El Monte, exported the advanced Nvidia chips and other technology to China from October 2022 through July 2025 without the required licenses from the U.S. Commerce Department, the Justice Department said, citing an affidavit filed with the complaint.

According to the affidavit, Geng and Yang's El Monte-based company, ALX Solutions, was founded in 2022, shortly after the U.S. imposed sweeping export controls on technology to China to slow Beijing's military modernization and began to require licenses for the chips. China opposed the U.S. move as harming normal trade.

Over 20 shipments from ALX went to shipping and freight forwarding companies in Singapore and Malaysia, which are often used as transshipment points for illegal goods to China, a federal agent, who works for the Commerce Department, said in the affidavit.

ALX received a $1 million payment from a China-based company in January 2024 and other payments from companies in Hong Kong and China, not from the freight forwarding companies, the agent said.

Nvidia H100s are advanced chips that can be used to train large language models and many other applications.

Records show that from at least August 2023 to July 2024, ALX Solutions bought over 200 Nvidia H100 chips from San Jose, California-based server maker Super Micro Computer, declaring that the customers were in Singapore and Japan, the agent said.

On one 2023 invoice valued at $28,453,855, ALX said the customer was in Singapore, but a U.S. export control officer in Singapore could not verify the chips arrived in the country and the company did not exist at the listed location, the document says.

"This case demonstrates that smuggling is a nonstarter," a Nvidia spokesperson said in a statement. "We primarily sell our products to well-known partners...who help us ensure that all sales comply with U.S. export control rules."

Diverted products have "no service, support or updates," the statement added.

Super Micro said in a statement it was "firmly committed to compliance with all U.S. export control regulations." It said it did not comment on ongoing legal matters, but cooperated with authorities in any such proceedings.

Geng and Yang appeared in federal court in Los Angeles on Monday, the Justice Department said. Geng, a permanent resident, was released on $250,000 bond. Yang, who overstayed her visa, has a detention hearing on August 12.

Lawyers for the defendants did not respond to requests for comment.

(Reporting by Karen Freifeld; Editing by Alistair Bell, Bill Berkrot and Lincoln Feast.)