Federal prosecutors have arrested the chief executive of a California computer company over an alleged Nvidia chip smuggling operation that moved more than $300 million worth of AI servers to China. In a press release Thursday, the Department of Justice accused 38-year-old Greg Lui, CEO of Earthmade Computer, of using false paperwork to disguise shipments he allegedly knew were ultimately bound for Chinese buyers.
According to the FBI’s indictment, Lui worked with freight-forwarding firms in Malaysia and Singapore to divert shipments containing Nvidia’s A100 and H100 GPUs into China. These are not Nvidia’s most advanced chips, but they can process enormous amounts of data and train large language models — capabilities the U.S. government fears could sharply accelerate China’s AI progress or strengthen its military.
How the Nvidia chip smuggling scheme allegedly worked
The DOJ says emails and bank records exposed the operation, which ran from October 2023 through August 2026. In one 2024 case, Lui submitted a purchase order to a U.S. manufacturer for 27 servers worth roughly $7,614,000, declared for Malaysia; a co-conspirator later told a Malaysian government official all 27 went to China. Another batch of 92 export-controlled servers allegedly traveled through Singapore to Malaysia, then Hong Kong, and finally to a firm in Hangzhou — described last year by The Wall Street Journal as China’s AI hub.
A third flagged shipment of 100 servers, each holding H100 GPUs worth over $22 million, allegedly relied on documents from a fake buyer whose CEO was listed as “Jackie Lui.” The FBI says Lui bought another person’s identity documents three years earlier to carry out business transactions in the scheme. His firm allegedly took in more than $176 million in 2024 alone, through accounts at Bank of America and JP Morgan. Readers following the hardware side of this story may recall when Nvidia Details Groq 3 LPX Architecture and First Third-Party Benchmarks walked through the performance tiers involved.
What Nvidia says, and what officials suspect
Lui faces three counts — conspiring to violate the Export Control Reform Act and Export Administration Regulations, federal smuggling, and money laundering — carrying up to 20 years for the conspiracy or laundering charges and 10 years for smuggling. Prosecutors want to seize all proceeds.
Nvidia has shifted from denying Nvidia chip smuggling to minimizing it, telling Bloomberg that “less than one half of one percent” of its products have been diverted to China — “a drop in the bucket,” a spokesperson said, next to the domestic compute China already has. Experts counter that the black market is hard to measure and likely far larger. A Bloomberg investigation built on conversations across five countries points to gaps in Nvidia’s due diligence, including a Taiwanese facility too small to house the servers it ordered and a Thai data center using fake leases. U.S. officials now want Nvidia to voluntarily tighten screening on shipments to Thailand, Malaysia, and Singapore. Nvidia disagrees that it could have stopped those shipments. For a lighter read on consumer pricing shifts, see Samsung Galaxy S26 FE vs S25 FE: Explaining the $50 Price Increase.
المصدر: Ars Technica
