California Man Arrested for Smuggling $300M in Nvidia AI Chips to China
Greg Lui, 38, of Southern California faces federal charges for allegedly routing restricted Nvidia GPU servers through Singapore and Malaysia to Chinese buyers.
Southern California Businessman Charged With $300M AI Hardware Smuggling Scheme
A Southern California man was arrested Thursday on federal charges of smuggling $300 million worth of export-controlled computer hardware to China without the required licenses, Courthouse News Service reports.
Greg Lui, 38, faces 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, according to federal prosecutors in Los Angeles.
Lui operated Earthmade Computer Inc. in the City of Industry, east of downtown Los Angeles. Prosecutors allege he purchased high-end servers equipped with Nvidia graphics processing units from U.S. manufacturers, falsely representing the hardware as destined for customers in countries that do not require a Commerce Department export license.
Between 2023 and 2024, Lui and associates shipped the servers to Singapore and Malaysia — jurisdictions where no license was required — before forwarding them to end users in China, prosecutors said.
Among the restricted products allegedly exported is the Nvidia H100, currently the most powerful GPU on the market and one designed specifically for AI applications. The H100 contains 80 billion transistors, enabling it to process large volumes of data significantly faster than other chips, according to an affidavit filed by a Commerce Department special agent in a related case last year. The chip can be used to train large language models, develop self-driving vehicles, and build medical diagnostic systems.
Many of Nvidia's most advanced chips carry price tags in the tens of thousands of dollars and underpin AI programs developed by companies including Microsoft and Meta. U.S. export controls have placed such chips off-limits to Chinese buyers, though some less advanced models may be shipped with a license.
"Protecting America's national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries' military capabilities," First Assistant United States Attorney Bill Essayli said in a statement. The language echoes an executive order signed by President Donald Trump two days earlier directing federal agencies to use the term "super intelligence" in place of "artificial intelligence."
"Preventing the illegal export of controlled technology is critical to protecting our national security," added John Helsing, Special Agent in Charge of the Department of Defense Office of Inspector General. "These technologies provide core advantages to U.S. forces, and ensuring they remain safeguarded prevents adversaries from exploiting them."
As of Thursday, the case docket in Los Angeles federal court had not yet listed an attorney representing Lui.
The case follows a similar prosecution filed last year, in which federal prosecutors in Los Angeles charged two Chinese nationals living in Southern California with illegally shipping tens of millions of dollars' worth of Nvidia chips to China — also routed through Malaysia and Singapore — without the required Commerce Department license.
Nvidia, headquartered in Santa Clara, California, has become the most valuable U.S. company by market capitalization in recent years, driven in large part by surging global demand for its AI-capable chips. Some members of Congress have called for further restrictions on Nvidia exports to China, citing national security concerns and the potential military applications of AI technology.
Source: Courthouse News Service