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US charges California man with smuggling $300 mln in Nvidia AI chips to China
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US federal prosecutors arrested Greg Lui, owner of Earthmade Computer Inc., on charges of illegally smuggling Nvidia AI chip servers worth $300 million to China between 2023 and 2024. The indictment, unsealed in Los Angeles, alleges Lui and unnamed co-conspirators used false documents and transshipment through Malaysia and Singapore to evade US export controls requiring licenses for advanced AI chips. Lui faces charges of conspiracy to violate export controls, smuggling, and money laundering. Prosecutors argue he poses a flight risk and should be held without bail. The case is part of a broader US crackdown on unauthorized transfers of advanced semiconductors to China, citing national security concerns. If convicted, Lui faces over 20 years in prison. The charges were announced jointly by federal prosecutors, the FBI, and the Commerce Department's Bureau of Industry and Security.
Source report
Federal prosecutors arrested a California man on Thursday, accusing him of violating U.S. export controls by smuggling Nvidia artificial intelligence chip servers worth $300 million to China.
Authorities allege that Greg Lui, owner of the private company Earthmade Computer Inc., collaborated with unidentified co-conspirators between 2023 and 2024 to ship servers containing restricted chips to buyers in China without obtaining the required U.S. licenses.
The charges against Lui represent the latest in a series of federal prosecutions targeting individuals accused of violating export controls, which are designed to prevent advanced U.S. chips from reaching China for national security reasons. In March, authorities charged a co-founder of Super Micro Computer Inc. with illegally reselling billions of dollars' worth of Nvidia chips to China; he has pleaded not guilty.
Court Appearance and Charges
Lui, 38, is expected to appear in court later Thursday. According to a statement from the Department of Justice, he faces one count of conspiracy to violate U.S. export controls, one count of smuggling goods from the United States, and one count of conspiracy to commit money laundering.
Prosecutors argued in court filings that Lui should be detained without bail, citing a "serious risk" that he would flee if released.
Prosecutors' Statement
"The defendant allegedly smuggled over $300 million worth of export-controlled computer servers to China using false documents and transshipment through third countries," said Bill Essayli, the chief assistant U.S. attorney in Los Angeles. "We will aggressively prosecute those who threaten our national security for profit."
How the Scheme Allegedly Worked
According to the Department of Justice, Lui and others initially exported the equipment to Malaysia and Singapore—jurisdictions that do not require licenses for purchasing advanced AI chips from U.S. companies. The servers were then shipped to end users in China.
Prosecutors allege that Lui was aware the chips in the servers were subject to U.S. export restrictions. As part of the scheme, Lui and his co-conspirators provided false documents to U.S. manufacturers, misrepresenting the final destination of the products.
In one purchase order, Lui obtained 27 servers containing Nvidia H100 GPUs from an unnamed U.S. manufacturer, valued at approximately $7.6 million.
Joint Investigation and Potential Penalties
The charges were announced jointly by federal prosecutors, the Federal Bureau of Investigation (FBI), and the Department of Commerce's Bureau of Industry and Security, which oversees U.S. export control programs.
The Department of Justice stated that if convicted on all counts, Lui could face more than 20 years in prison. The court docket did not list an attorney for Lui. A representative for Nvidia did not immediately respond to a request for comment.
Case details: USA v. Lui, 26-cr-00618, U.S. District Court for the Central District of California (Los Angeles).
Source: Bloomberg News
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