The Arrest and Alleged Route
A California man has been arrested for smuggling over $300 million worth of restricted Nvidia chips to China in violation of U.S. export controls. According to a U.S. Department of Justice press release, the defendant, Greg Lui, and co-conspirators smuggled the chips in high-end servers from 2023 to 2024. He allegedly first exported the chips to Malaysia and Singapore, jurisdictions where the restrictions do not apply, before shipping them to buyers in China, including the Chinese government.
Authorities state that the defendant, owner of California-based company Earthmade Computer Inc., used false paperwork to misrepresent the final destination of the hardware, falsely claiming the controlled chips were headed to permissible end users that did not require an export license.
Charges and Legal Penalties
The Department of Justice has charged Lui with one count of conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, one count of outbound smuggling, and one count of conspiracy to commit money laundering. If convicted on all charges, the defendant faces up to 20 years in prison. The FBI, the Department of Commerce, and the Defense Criminal Investigative Service are jointly investigating the case.
Broader Export Enforcement Context
The incident is part of a broader series of crackdowns addressing the illegal export of restricted artificial intelligence accelerators and graphics processing units to China. The United States and its allies have implemented strict export controls on advanced AI hardware to preserve technological advantages, though high global demand continues to drive underground market activity.
Commenting on the case, law enforcement officials emphasized that preventing the illegal export of controlled technology remains vital to safeguarding national security and protecting advanced defense capabilities from exploitation by foreign adversaries.
