A California technology executive has been arrested and charged with allegedly helping move more than $300 million worth of export-controlled computer servers containing NVIDIA AI chips to China through third countries.
Greg Lui, 38, also known as Yiu Kong Lui, owns Earthmade Computer Inc., a technology company based in the City of Industry, California. Federal prosecutors say he and his co-conspirators used Malaysia and Singapore as transit points to conceal China’s role as the ultimate destination for restricted equipment.
The case highlights the growing challenge facing U.S. authorities as Washington tightens controls on advanced computing technology that can be used to train artificial-intelligence models and support high-performance computing.
Lui has been charged with conspiracy to violate U.S. export-control laws, outbound smuggling, and conspiracy to commit money laundering. He is presumed innocent unless proven guilty in court.
What is Greg Lui accused of doing?
According to a federal indictment, Lui and his associates used Earthmade Computer to purchase high-end servers containing restricted graphics processing units from U.S. manufacturers between 2023 and 2024.
Prosecutors allege that the buyers and true destination were concealed from U.S. suppliers. Instead of declaring China as the ultimate destination, the shipments were presented as being intended for countries such as Malaysia and Singapore.
Those countries did not require the same U.S. export licences for the products involved, according to the Justice Department.
The indictment alleges that the equipment was then re-exported from those countries to China, allowing the parties involved to bypass U.S. restrictions.
Which NVIDIA chips were involved?
The servers allegedly contained NVIDIA A100 and H100 GPUs, among other high-performance computing hardware.
The H100, introduced in 2022, is designed for demanding AI workloads, including the training and operation of large language models. The A100 is an earlier-generation accelerator that is also widely used in AI and high-performance computing.
Neither chip represents NVIDIA’s newest generation today, but both remain powerful computing components and have been subject to U.S. export restrictions involving China.
The case therefore concerns more than ordinary consumer graphics cards. Prosecutors say the equipment could provide substantial computing capacity for advanced AI applications.
How did the alleged transshipment scheme work?
The indictment describes a pattern in which servers were legally shipped from the United States to an intermediary country before allegedly being forwarded to China.
In one example, prosecutors say Lui placed an order for 27 servers equipped with NVIDIA H100 GPUs for approximately $7.6 million.
The paperwork identified Malaysia as the destination. The equipment was shipped from the Los Angeles area to Kuala Lumpur.
According to prosecutors, a co-conspirator later told a Malaysian government official that the 27 servers had actually been transshipped to a buyer in China.
That episode is one of the examples federal investigators are using to support the broader allegations against Lui.
Why were Malaysia and Singapore important?
The alleged scheme relied on differences between U.S. export requirements for China and those applicable to other destinations.
The Justice Department says the servers could be shipped to countries including Malaysia and Singapore without the same export licences that would have been required for direct shipments to China.
That created an opportunity for goods to be moved through an intermediary destination before allegedly being sent onwards.
U.S. export-control authorities have increasingly focused on transshipment routes because restricting direct exports does not necessarily prevent controlled technology from reaching a prohibited end user through another country.
The Lui case illustrates why authorities place emphasis not only on where a product is initially shipped but also on who will ultimately use it.
Did Lui allegedly falsify documents?
Yes.
Prosecutors accuse Lui and his co-conspirators of providing false or misleading information to U.S. manufacturers about the intended destinations and users of the equipment.
The indictment alleges that the paperwork made the products appear eligible for shipment to permitted destinations when the actual end users were in China.
In another alleged transaction, prosecutors said documentation was submitted using the identity of a purported buyer whose details were not genuine.
Federal investigators say emails, bank records and shipping documentation helped establish the alleged pattern.
How much money was involved?
Federal prosecutors say the scheme involved more than $300 million worth of export-controlled computer servers.
The indictment also alleges that Earthmade received more than $176 million from two Malaysia-based shipping or transshipment companies during 2024.
The $300 million figure refers to the value of the restricted server transactions prosecutors attribute to the alleged scheme. It should not be interpreted as $300 million in profit for Lui or Earthmade.
The exact amount of financial benefit to each participant will be a matter for the criminal proceedings.
What charges does Greg Lui face?
Lui faces three federal counts.
They include conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, outbound smuggling and conspiracy to commit money laundering.
The Justice Department says each charge carries a substantial potential penalty.
If convicted, the export-control conspiracy count carries a statutory maximum of 20 years in prison. The money-laundering conspiracy also carries a maximum of 20 years, while the outbound-smuggling charge carries a maximum of 10 years.
The potential maximum penalties should not be described as the sentence Lui will receive. Actual punishment, if there is a conviction, would depend on the court and the applicable federal sentencing rules.
Why does the US restrict advanced AI chips to China?
Washington has imposed export controls on certain advanced computing products because U.S. officials view access to cutting-edge computing as a national security issue.
High-performance GPUs can be used to train sophisticated AI systems, conduct scientific computing and perform other calculations that may have military and intelligence applications.
U.S. policy has therefore sought to restrict China’s access to some of the most capable American-designed or American-manufactured computing technologies.
The regulations have evolved over time as chip manufacturers introduce new products and companies attempt to adapt hardware to remain within changing legal limits.
That has made export compliance an increasingly complicated issue for semiconductor companies, distributors and technology resellers.
Why is NVIDIA at the center of repeated smuggling cases?
NVIDIA dominates the market for high-end AI accelerators, making its products particularly valuable to organisations building large computing clusters.
Demand for its GPUs has surged alongside the expansion of generative AI and large-scale data centers.
That has also created incentives for intermediaries to find ways around restrictions imposed on shipments to China.
Federal authorities have brought several cases involving alleged diversion of NVIDIA-powered servers and chips, including prosecutions involving people connected to other technology companies.
The repeated investigations underscore the difficulty of policing high-value hardware that can be legally sold in one country but restricted when it reaches another.
How is the government investigating the case?
The investigation involves several federal agencies.
The U.S. Department of Commerce’s Bureau of Industry and Security, the Defense Criminal Investigative Service and the FBI’s Counterintelligence and Espionage Division are participating in the investigation.
The Justice Department is prosecuting the case through attorneys specializing in national security, export controls and financial crimes.
Investigators are also seeking forfeiture of assets allegedly connected to the scheme.
The involvement of multiple agencies reflects the overlap between export-control enforcement, financial investigations and national-security concerns.
Is this the first major NVIDIA chip-smuggling case?
No.
U.S. authorities have increasingly pursued alleged schemes involving the diversion of advanced NVIDIA hardware to China.
The cases have involved different companies, intermediaries, and routes, but the underlying challenge is similar: preventing controlled technology from reaching restricted destinations through indirect transactions.
The latest prosecution comes amid wider scrutiny of the global supply chain for AI chips.
Authorities have also raised concerns about companies accessing restricted computing resources remotely from overseas data centers, which can create a different enforcement challenge from physically moving chips across borders.
Why are servers, rather than individual chips, often involved?
Advanced GPUs are frequently deployed inside complete servers rather than sold solely as standalone components to major data-center customers.
A server can contain multiple high-end accelerators along with the networking, memory, and cooling systems needed to operate them.
That means a shipment of servers can represent a significant amount of concentrated computing power.
For export-control enforcement, regulators therefore have to track not only individual chips but also complete computing systems, their components, purchasers, end users and final destinations.
The Lui indictment illustrates that complexity, with prosecutors focusing on the servers as controlled computing equipment containing restricted GPUs.
What happens next in the case?
Lui was arrested in California and is scheduled to appear in federal court for his initial proceedings.
The government’s allegations will now face scrutiny through the criminal justice process. Prosecutors will have to prove the charges beyond a reasonable doubt.
The defense will have an opportunity to challenge the government’s evidence and dispute the allegations.
That evidence is expected to include communications, shipping records, corporate documents, financial transactions, and information concerning the final destination of the servers.
The case could also provide a clearer picture of how U.S. authorities are tracking attempts to circumvent increasingly sophisticated semiconductor export controls.
What does the case mean for the AI chip trade?
The prosecution demonstrates how export controls have become part of the global AI supply chain.
The U.S. is attempting to limit the flow of certain advanced computing technologies to China, while companies and intermediaries operate across multiple jurisdictions with different regulatory requirements.
That creates opportunities for legitimate international trade, but it can also create vulnerabilities that smugglers and other actors may try to exploit.
For the U.S. government, the challenge is making restrictions effective without leaving obvious gaps between the original exporter, the transit country and the eventual end user.
For companies, the case is another reminder that export compliance does not necessarily end when a product reaches an approved first destination.
The investigation will determine whether the allegations against Lui can be proved in court. Until then, the $300 million figure, the alleged routing through Malaysia and Singapore, and the claimed use of false documentation remain allegations contained in the federal indictment.
