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California tech CEO arrested, faces up to 20 years in prison for smuggling $300 million in Nvidia AI servers to China — federal prosecutors say chips were routed through Malaysia and Singapore using false paperwork
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 (DoJ) press release on October 1, the defendant — Greg Lui, also known as Yiu Kong Lui — and unidentified 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 don't apply, before shipping them to buyers in China, including the Chinese government.
Authorities say the defendant, owner of California-based company Earthmade Computer Inc., and his co-conspirators had used false paperwork to misrepresent the chips’ final destination, purporting that the controlled chips would be going to permissible end users and end destinations that did not require an export license. “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 for the Central District of California.
The DOJ 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 of all charges, the defendant could face up to 20 years in prison. He was arraigned and made his initial appearance on October 1. The FBI, the Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement, and the Defense Criminal Investigative Service are jointly investigating the case.
Speaking on the Liu incident, Special Agent in Charge John E. Helsing of the Department of Defense Office of Inspector General Defense Criminal Investigative Service (DCIS) Western Field Office said, “Preventing the illegal export of controlled technology is critical to protecting our national security. These technologies provide core advantages to U.S. forces, and ensuring they remain safeguarded prevents adversaries from exploiting them. Today’s action underscores our commitment to protecting advanced defense capabilities and enforcing the laws that keep them out of the hands of those who may threaten the United States.”
Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace.
I'm sure Jensen is sitting in an office somewhere, sweating in a black leather jacket. Then again, perhaps not. He's in a pretty untouchable position at this point.
Hilarious to read they're using Trump's stupid moniker for AI, "Super Intelligence."
Nvidia is a $5.5 trillion dollar company.
$300 million sneaking out to China is a rounding error ... 300M / 5.5T = 0.0055%.
For comparison that would be the equivalent of misplacing $275 on a $50,000 annual salary.
Imagine going to prison because the buyer for your Geforce 2060 Super posted on Ebay turned out to be Chinese company somehow buying it illegally.
But at such scale , I doubt that he was alone in this ... Some one in Nvidia for sure helped him and knew about it.
He runs Earthmade Computer, a company which builds AI servers. So it's not that strange that they'd be buying parts for AI servers and then selling them.
