California Business Owner Charged with Smuggling $300M in Nvidia AI Chips to China

security

Prosecutors allege that Greg Lui assisted China in acquiring advanced hardware to advance its supercomputing capabilities.

A California business owner was arrested Thursday and charged with allegedly smuggling Nvidia hardware to China without required export licenses. The US government has made restricting access to high-end GPUs a priority.

Greg Lui, 38, is accused of attempting to export roughly $300 million worth of Nvidia components—typically used for artificial intelligence development—through US-based freight companies and Malaysian transshipment firms.

Prosecutors say Lui used his company, Earthmade Computer Inc, to purchase servers containing high-performance Nvidia parts, including A100, H100, PNY GeForce RTX 4090, and GeForce RTX 5090 GPUs.

He then routed the shipments to Malaysia and Singapore, countries that do not require Commerce Department licenses, where intermediaries forwarded them to China to evade US export controls.

His alleged conduct violates regulations prohibiting the sale of economically sensitive equipment to adversarial nations such as China on national security grounds.

In essence, the US seeks to prevent its advanced hardware from accelerating China’s pursuit of AI supremacy.

Or, as US officials now describe it, “super intelligence (SI).”

“SI is the defining technology of the era,” said John A. Eisenberg, assistant attorney general for national security. “The National Security Division will protect the American advantage in the chips that power this technology—products of our unparalleled innovation and hard work—from illegal diversion by our economic and military adversaries.”

Court documents indicate the scheme ran from approximately October 2023 until at least August 12, 2026.

Prosecutors claim Lui received more than $176 million from two Malaysian transshipment companies and, in return, connected them with US suppliers capable of providing Nvidia hardware, brokering nearly $300 million in sales.

The US government asserts Lui was fully aware that export laws restricted shipments of advanced Nvidia chips to China to license holders.

Documents show 92 servers were exported from San Francisco International Airport to Kuala Lumpur under Earthmade’s name, with onward re-shipment from Malaysia to Hong Kong destined for a Chinese customer.

The indictment alleges Lui directed a US front company to fraudulently list the recipient as Jackie Lui, the purported CEO of “Topmost,” a California company registered by the chief technology officer of one of the Malaysian transshipment firms.

Prosecutors further claim Lui illegally purchased identity documents in 2021 as part of the scheme.

Lui faces one count each of violating the Export Control Reform Act and the Export Administration Regulations, outbound smuggling, and money laundering, carrying a maximum prison sentence of 50 years.

“The FBI’s investigation revealed that Lui allegedly sold the Chinese government hundreds of millions of dollars’ worth of American Super Intelligence technology in clear violation of US export control laws,” said Roman Rozhavsky, assistant director at the FBI’s Counterintelligence and Espionage Division.

“Controlling the export of advanced SI technology is critical to safeguarding our national security and defending the homeland,” Rozhavsky added. “The FBI will continue holding accountable anyone who violates US export laws to enrich themselves and aid our adversaries.”

The Register contacted Earthmade and Nvidia for comment. ®

Source link