US Charges California Man With Smuggling $300 Million in Nvidia AI Chips to China

Federal prosecutors arrested a California man on October 1 on charges of smuggling computer servers containing more than $300 million worth of Nvidia artificial intelligence chips to China in violation of US export controls.

Greg Lui, 38, the owner of privately held Earthmade Computer Inc., was expected to be arraigned later that day, the Justice Department said. He faces one count each of conspiracy to violate US export controls, outbound smuggling and conspiracy to commit money laundering. The charges were announced jointly by federal prosecutors, the FBI and the Commerce Department's Bureau of Industry and Security, which oversees US export-control programs.

Charges and a detention fight

Prosecutors argued in a court filing that Lui should be detained without bail because of a "serious risk" he would flee if released. If convicted of all the charges, he faces more than 20 years in prison, the Justice Department said.

"This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China," said First Assistant US Attorney Bill Essayli in Los Angeles. "We will aggressively prosecute those who put our national security at risk for profit."

Servers routed through Malaysia and Singapore

The Justice Department said Lui and others exported the equipment initially to Malaysia and Singapore, jurisdictions that do not require licenses for the purchase of advanced AI chips from US companies. From there, the servers were shipped to the ultimate buyers in China, according to the agency.

Prosecutors allege that Lui arranged the sales knowing that the chips the servers contained were subject to US export curbs. As part of the scheme, he and his co-conspirators provided false documentation to US manufacturers that misrepresented the final destination of the products.

In one purchase order, Lui obtained 27 servers containing Nvidia H100 GPUs from an unidentified US manufacturer for approximately $7.6 million, prosecutors said. Between January and October 2024, Earthmade received more than $176 million from two Malaysia-based shippers connected to the scheme, according to court papers.

A widening export-control crackdown

The case is the latest in a series of federal prosecutions of individuals accused of violating export controls aimed at keeping advanced US-made chips out of Chinese hands over national security concerns. In March, authorities charged a co-founder of Super Micro Computer Inc. with illegally diverting billions of dollars in Nvidia chips to China; he pleaded not guilty.

The case is USA v. Lui, 26-cr-00618, in US District Court for the Central District of California in Los Angeles. The court docket did not provide information about Lui's lawyer, and Nvidia representatives did not immediately respond to a request for comment.