California Man Charged With Smuggling $300 Million in Nvidia AI Servers to China
Prosecutors say Greg Lui routed restricted hardware through Singapore and Malaysia on false paperwork. Some buyers were Chinese government entities.
Federal prosecutors have charged a Southern California businessman with smuggling more than $300 million worth of export-controlled artificial intelligence servers to China. Greg Lui, 38, also known as Yiu Kong Lui, owns Earthmade Computer Inc. in the City of Industry, east of downtown Los Angeles. He was arrested and made an initial court appearance on October 1.
Lui is charged with one count of conspiracy to violate the Export Control Reform Act, one count of outbound smuggling and one count of conspiracy to commit money laundering. If convicted on all counts, he faces up to 20 years in prison.
According to the government, Lui bought high-end servers loaded with Nvidia graphics processing units from U.S. manufacturers. He allegedly told the manufacturers the machines were headed to customers in countries where the Commerce Department does not require an export license. From 2023 through 2024, prosecutors say, the servers were shipped to Singapore and Malaysia and then forwarded to buyers in China, including government entities.
"This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China," First Assistant U.S. Attorney Bill Essayli said in announcing the case. The investigation was carried out by the FBI, the Commerce Department's Bureau of Industry and Security and the Defense Criminal Investigative Service.
The case is the latest in a run of prosecutions over the diversion of advanced American chips. Washington restricts sales of the most powerful AI processors to China because they can be used to train frontier models and to support military applications. Those limits have created a lucrative gray market, and investigators have increasingly focused on transshipment through Southeast Asian hubs where the hardware can be relabeled and resold.
The Lui indictment follows similar enforcement activity. Nine people were indicted in Taiwan in September over the illegal export of Nvidia's B300 GPUs to China. The Justice Department has also announced other multimillion-dollar cases involving chip diversion in recent months, as officials try to close the gap between what the export rules say and what actually reaches Chinese buyers.
The charges are allegations, and Lui is presumed innocent unless proven guilty. The charging documents do not accuse Nvidia of wrongdoing.
The scale of the alleged scheme is notable. At $300 million, it represents a substantial amount of computing power moving outside the legal channels meant to keep it out of Chinese hands, and it underscores a difficulty for regulators: servers are bought by the thousand, shipped through multiple countries, and sold on to buyers who are far from the original sale. The case will test how well prosecutors can follow that chain from a warehouse in California to a data center in China.
