Feds: California Man Smuggled $300M in Nvidia Chips
A San Gabriel Valley technology executive was arrested Thursday on federal charges of smuggling more than $300 million worth of restricted computer hardware to China, including high-end Nvidia AI chips destined for the Chinese government, the Justice Department said.
Greg Lui, the owner of Earthmade Computer Inc. in the City of Industry, allegedly shipped servers packed with U.S.-manufactured Nvidia chips to China while falsely telling chipmakers the hardware was bound for customers in Malaysia and Singapore, according to the federal indictment filed this week.
The indictment was filed Tuesday in the Central District of California. Lui faces three counts:
- Conspiracy to violate export controls
- Outbound smuggling
- Conspiracy to commit money laundering
The U.S. Commerce Department does not require an export license to ship this class of hardware to Malaysia or Singapore, but it does for China, a licensing gap prosecutors say Lui exploited for profit. An attorney representing him had not been listed in available court documents, and Lui could not be reached for comment.
"Protecting America's national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries' military capabilities," First Assistant U.S. Atty. Bill Essayli said in a Justice Department release. "We will aggressively prosecute those who put our national security at risk for profit."
Prosecutors built the case on bank records and emails. Among the evidence spelled out in the indictment:
- A purchase order to a U.S. manufacturer for 27 servers containing Nvidia H100 chips, valued at about $7.6 million
- A packing list showing the servers shipped from the Los Angeles area to Kuala Lumpur, Malaysia
- An email, sent soon after, in which a co-conspirator told a Malaysian government official that all 27 units had been shipped on to China
- More than $176 million that Earthmade received in 2024 from two Malaysia-based shipment companies as part of the alleged scheme
Investigators say Lui used freight-forwarding companies to move the servers from Malaysia and Singapore onward to China. The chips named in the case include Nvidia's A100 and H100.
Neither is Nvidia's newest silicon, but both remain powerful enough for serious AI workloads. The H100, released in 2022, is optimized for large language models that generate text, code, images, video and audio. Demand for the chipmaker's GPUs has ballooned during the AI boom, and lawmakers worry that access to such hardware could strengthen China's bid for technological and military dominance while eroding the U.S. lead.
The case lands in a charged political moment. President Trump signed an executive order this week rebranding "artificial intelligence" technology as "super intelligence," rebuffing calls for tighter regulation. His administration has moved in the opposite direction on exports: Trump last year relaxed some controls on advanced chips sold to China, and late last year authorized Nvidia to sell its H200 chip there in exchange for 25% of the revenue, though exports remain heavily restricted.
It is not an isolated prosecution. Federal authorities have repeatedly charged brokers with routing controlled chips abroad:
- Chuan Geng and Shiwei Yang, who owned ALX Solutions Inc., were arrested on suspicion of illegally exporting "tens of millions" of dollars' worth of microchips
- A separate case charged two Chinese nationals living in Southern California over a similar export scheme
- A Taiwan probe this year traced Nvidia chips routed through Japan, while a Supermicro co-founder was accused of smuggling $2.5 billion in AI servers
After the U.S. imposed chip-export controls on China in 2022, Nvidia designed less-powerful versions to serve the market while complying with the rules, but those reduced-capability models were later restricted too. The result is a persistent gray market: demand that restrictions do not erase, and a steady stream of defendants accused of trying to satisfy it.
For Nvidia, the enforcement headlines arrive against a volatile backdrop. The company's stock has tumbled 16% since hitting an all-time high on May 14, even as its GPUs continue to dominate the AI data center market. Each new smuggling case underscores a tension policymakers have yet to resolve: the harder the controls, the more valuable the workaround, and the more cases like Lui's prosecutors are likely to bring.
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