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California man charged in $300M Nvidia chip smuggling case
Prosecutors allege Greg Lui sent export-controlled computer servers to buyers in China
Nvidia H100 chips. (Dhiraj Singh/Bloomberg)
Key Takeaways:
- Federal prosecutors arrested California computer seller Greg Lui on Oct. 1, accusing him of smuggling export-controlled servers with Nvidia chips to China.
- Prosecutors alleged Lui routed more than $300 million in servers through Malaysia and Singapore using false documents to evade U.S. export controls.
- Lui faces three charges and more than 20 years in prison if convicted, while prosecutors seek detention without bail over flight risk.
Federal prosecutors arrested a California man Oct. 1 on charges of smuggling computer servers containing $300 million worth of Nvidia Corp. artificial intelligence chips to China in violation of U.S. export controls.
Authorities said that Greg Lui, the owner of privately held Earthmade Computer, worked with other unidentified co-conspirators from 2023 to 2024 to ship servers containing the restricted chips to buyers in China without the required U.S. licenses.
The charges against Lui mark the latest in a series of federal prosecutions of individuals accused of violating export controls aimed at keeping advanced U.S.-made chips out of Chinese hands over national security concerns. In March, authorities charged a co-founder of Super Micro Computer with illegally diverting billions of dollars in Nvidia chips to China. He pleaded not guilty.
“This case shows yet again that smuggling is a losing proposition — legally, economically and technically,” Nvidia said in a statement. “Our work with law enforcement has led to prosecutions, and we will continue to engage with law enforcement.”
Lui, 38, is facing one count each of conspiracy to violate U.S. export controls, outbound smuggling and conspiracy to commit money laundering, the agency said.
Prosecutors argued in a court filing that Lui should be detained without bail because of a “serious risk” he would flee if released.
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“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 U.S. Attorney Bill Essayli in Los Angeles. “We will aggressively prosecute those who put our national security at risk for profit.”
The Justice Department said that Lui and others exported the equipment initially to Malaysia and Singapore, jurisdictions that don’t require licenses for the purchases of advanced AI chips from U.S. companies. The servers were then shipped to the ultimate buyers in China, according to the agency.
Lui arranged for the sales of the servers knowing that the chips they contained were subject to U.S. export curbs, the prosecutors alleged. As part of the scheme, authorities said, Lui and his co-conspirators provided false documentation to U.S. manufacturers that misrepresented the final destination of the products. The alleged conspiracy continued until at least mid-August, prosecutors said in charging papers.
In one purchase order, Lui obtained 27 servers from an unidentified U.S. manufacturer containing Nvidia H100 GPUs for about $7.6 million, prosecutors said.
The charges were announced jointly by federal prosecutors, the FBI and the Commerce Department’s Bureau of Industry and Security, which oversees U.S. export-control programs.
If convicted of all the charges, Lui could face more than 20 years in prison, the Justice Department said.
The court docket didn’t provide information on lawyer representation for Lui.
The case is USA v. Lui, 26-cr-00618, U.S. District Court, Central District of California (Los Angeles).
