California business owner arrested over alleged $300M AI chip smuggling to China
In brief
- Greg Lui, 38, was taken into custody October 1 after a September 29 indictment.
- Prosecutors allege Lui moved over $300 million in export-controlled AI servers to China.
- Shipments were allegedly routed through Malaysia and Singapore with falsified paperwork, the indictment says.
- Nvidia H100 servers are named as the allegedly diverted hardware; Nvidia isn't accused of wrongdoing.
- Lui hasn't been convicted; the case proceeds in federal court in Los Angeles.
What the indictment alleges
Lui owns Earthmade Computer Inc. Prosecutors allege the scheme ran between 2023 and 2024, and the goods weren't ordinary PCs. They were high-end computer servers packed with US-manufactured GPUs (the processors used primarily for advanced AI applications).
Shipping that hardware to China legally would've required an export license from the US Commerce Department. Prosecutors allege Lui never sought one.
Instead, the indictment says shipments were routed through Malaysia and Singapore, with falsified documentation allegedly used to conceal the true destination.
One order stands out. In January 2024, according to the allegations, there was an order for 27 Nvidia H100 GPU servers worth approximately $7.6 million. The money trail described by prosecutors is far bigger than that single deal: Earthmade Computer Inc. allegedly received more than $176 million from two Malaysia-based shipping companies between January and October 2024.
The charges
Lui faces three counts. They're conspiracy to violate the Export Control Reform Act and outbound smuggling, plus conspiracy to commit money laundering. If convicted, he faces up to 20 years in prison on the conspiracy and money laundering charges and up to 10 years on the smuggling charge, as reported by Crypto Briefing.
He hasn't been convicted of anything.
These are allegations, and the next phase will play out in federal court in Los Angeles.
Where Nvidia and Washington fit
Nvidia isn't accused of wrongdoing. Its H100 servers are named in the indictment only as the kind of hardware allegedly diverted.
US authorities have framed the case as one piece of a larger enforcement effort to stop advanced computing technology from being diverted to China. The Department of Justice and the FBI are involved in that broader operation, while day-to-day oversight of these exports sits primarily with the Commerce Department's Bureau of Industry and Security (BIS).
Frequently asked questions
What charges does Greg Lui face in the AI chip smuggling case?
Lui faces three counts: conspiracy to violate the Export Control Reform Act, outbound smuggling, and conspiracy to commit money laundering. If convicted, he faces up to 20 years on the conspiracy and money laundering charges and up to 10 years on smuggling. He has not been convicted, and the charges are allegations.
Is Nvidia accused of wrongdoing in the Lui indictment?
No. Nvidia is not accused of wrongdoing. Its H100 GPU servers are named in the indictment as the type of hardware allegedly diverted, including a January 2024 order for 27 H100 servers worth approximately $7.6 million.
How were the AI servers allegedly shipped to China?
According to the indictment, shipments were routed through Malaysia and Singapore, and falsified documentation was allegedly used to conceal the true destination. Prosecutors allege Lui never sought the Commerce Department export license required to ship the servers to China legally.
