Communist China is always looking to steal technology from the West through its “Thousand Talents” espionage program, and this week brought two more instances from Texas.
First up: A Chinese AI chip smuggling ring busted by the Feds.
Federal officials say a Houston-based smuggling ring funneled some of the world’s most advanced artificial intelligence technology to China, marking one of the largest known violations of U.S. export-control laws in recent years.
The case, outlined in a release from the U.S. Attorney’s Office for the Southern District of Texas, centers on Hao Global LLC and its owner, 43-year-old Missouri City resident Alan Hao Hsu.
According to prosecutors, Hsu and a network of partners moved tens of thousands of restricted Nvidia H100 and H200 GPUs out of the country between late 2024 and early 2025. These are the same high-end chips that drive large-scale AI development, from national security research to sophisticated military systems.
Hsu pleaded guilty earlier this fall after admitting he knowingly exported or attempted to export more than 160 million dollars’ worth of controlled GPUs to the People’s Republic of China, Hong Kong, and other destinations where federal law bars their shipment.
According to investigators, the group disguised the nature of the products, falsified shipping records, and routed more than 50 million dollars in wire transfers originating from China to finance the operation. Hsu is the first person ever charged and convicted in an AI diversion case.
Court documents describe mislabeled cargo, falsified customer identities, and a steady flow of high-value chips moved through U.S. warehouses before being pushed overseas. Prosecutors say the conspirators relied on a network of intermediaries to hide the ultimate destination of the technology, which the U.S. considers critical to maintaining its strategic advantage in artificial intelligence.
While Hsu pleaded guilty, the case did not end with him. Two others now face federal charges: 43-year-old Fanyue “Tom” Gong, a Chinese national living in New York, and 58-year-old Canadian citizen Benlin Yuan of Mississauga, Ontario. Both men were arrested in recent weeks.
Gong, who owns a New York tech company, is accused of using straw purchasers and overseas partners to obtain GPUs, strip their Nvidia labels, rebrand them with a fake company name, and ship them overseas as generic computer parts. Prosecutors say he coordinated with employees at a Hong Kong logistics firm and a China-based AI company to move the technology into restricted jurisdictions.
Yuan, meanwhile, allegedly helped organize teams to inspect mislabeled shipments and coached associates on how to provide false information to federal agents. Court filings indicate he discussed fabricating a cover story after authorities detained some of the hardware. He also faces accusations that he assisted with handling and storing additional restricted GPU shipments tied to the same Hong Kong firm.
Hsu faces up to 10 years in federal prison at his sentencing in February. Gong could receive up to 10 years if convicted, while Yuan faces as many as 20 years on conspiracy charges. Hsu remains free on bond. Gong and Yuan are being held pending further proceedings.
Federal officials framed the case as a direct threat to national security.
U.S. Attorney Nicholas Ganjei said the smuggling network undermined the country’s technological edge at a time when AI capability is tightly linked to military strength. Ganjei noted, “These chips are the building blocks of AI superiority and are integral to modern military applications. The country that controls these chips will control AI technology; the country that controls AI technology will control the future. The Southern District of Texas will aggressively prosecute anyone who attempts to compromise America’s technological edge.”
Eh, the “country that controls these chips will control AI technology” is an overstatement. Nvidia’s Tensor Cores are highly efficient at performing matrix operations, but they’re not magic. There’s no calculation they do you can’t perform on a CPU or GPU, albeit it more slowly and at a much higher cost per watt.
The second case of Chinese espionage comes from Texas A&M:
Texas A&M’s associate head of graduate studies of chemistry resigned and returned to his homeland to work at a Chinese government-funded laboratory. A research security specialist called this a security failure on the university’s part.
In October 2025, Yongjiang Laboratory in Ningbo, China, announced that Dr. Lei Fang had taken a leadership position at the lab. Up to that time, he had worked at Texas A&M since 2013 before resigning this spring.
Research security specialist Allen Phelps of IPTalons identified Yongjiang as a Chinese government-funded nonprofit, and part of China’s network of state-backed labs. The U.S. Office of the Director of National Intelligence identified China as a national security threat in its 2025 Annual Threat Assessment.
“From the day I set foot outside the country, I knew I was coming back,” Dr. Fang said, according to a Google translation of the Yongjiang press release. Born in 1983 in Poyang, China, Dr. Fang’s loyalty to his homeland appears to have never left his mind. Despite studying and working in multiple American universities since 2006, Phelps’ research showed Dr. Fang “extensively traveled” to China to attend conferences and give lectures between 2014 to 2020.
In a report he provided to Texas Scorecard, Phelps’ analysis of open source information found a “clear, documented pattern of foreign engagement” that he believes should have alarmed Texas A&M because of his work while employed by them.
For example, Phelps reported that Dr. Fang licensed a Texas A&M-owned U.S. patent to Ningbo Kunpeng Environmental Sci-Tech Co., Ltd., a company Dr. Fang co-founded in 2017. Phelps called this a “stunning conflict of interest.” He added that “this not only raises questions about the proprietary nature of the research but also about whether his primary commitment was to the American taxpayer who funded the underlying science, or to his foreign commercial and academic partners.”
Beyond just Texas A&M, there are national security concerns. “Dr. Fang was not just a professor; he was a recipient of prestigious, sensitive federal grants … that were active up to or beyond his 2025 departure,” Phelps wrote the report.
Dr. Fang was a panelist at the National Defense Science and Engineering Graduate Fellowship in 2016 and 2017, and was a technical reviewer for American research proposals. Phelps wrote this gave Dr. Fang “privileged, non-public access to the cutting-edge research” of competing scientists in America. Phelps wrote that Dr. Fang took this “sensitive information” back with him to help run Yongjiang Lab.
Phelps also noted Dr. Fang’s public resume showed that during the same time he received U.S. federal funding, he had a “Flexible Joint Visiting Professor” position with Nanchang Hangkong University’s Key Laboratory of Jiangxi Province—a Chinese lab known to engage in national defense research.
Dr. Fang joining Yongjiang is another red flag. Phelps reported this lab seems to serve as a central hub for Chinese talent recruitment programs. Such efforts have long been part of China’s infiltration operation of American universities. A February 2020 report from the U.S. House Foreign Affairs Committee sounded the alarm on China’s talent recruitment efforts as a means “to supercharge Chinese innovation at U.S. taxpayers’ expense.”
At this point, we should ban Chinese nationals from holding any position at any U.S. research university, laboratory or institute that takes federal money. China will always demand their citizens steal from the west if put into a position to do so.