A California technology executive has been arrested after US prosecutors accused him of helping move more than $300 million (£226.53 million) worth of export-controlled computer servers containing Nvidia GPUs to China.
Greg Lui, 38, the owner of Earthmade Computer, was charged in a three-count federal indictment after investigators alleged that servers were presented as shipments for Malaysia and Singapore before being re-exported to China.
The case involves emails, bank records and a specific $7.6 million (£5.74 million) order for 27 Nvidia H100 servers as evidence of the alleged operation. Lui is accused of conspiracy to violate US export controls, outbound smuggling and conspiracy to commit money laundering.
If convicted on all three counts, the statutory maximum penalties total 50 years, although that does not mean he would necessarily receive that sentence. The indictment remains an allegation, and Lui is presumed innocent unless proven guilty in court.
Nvidia AI Servers and Alleged China Export Scheme
According to the indictment, Lui owns Earthmade Computer, a technology company in City of Industry, California.
Prosecutors allege that between 2023 and 2024, he and co-conspirators bought export-controlled servers containing high-end GPUs and arranged for them to be sent through third countries where the relevant US export licence was not required.
Prosecutors allege that the servers were then re-exported to China, while the paperwork identified different end users and destinations.
The indictment alleges that false documentation was supplied to US manufacturers and that freight-forwarding companies were used to move the equipment between countries.
The hardware included Nvidia A100 and H100 GPUs, according to reporting based on the indictment. The H100, introduced in 2022, is designed for demanding computing workloads including the training and running of large language models.
While these chips are no longer Nvidia's newest products, they remain capable of handling workloads used in advanced AI systems.
The money trail is another part of the government's case. Prosecutors allege that Earthmade received more than $176 million (£132.90 million) from two Malaysia-based shipment companies between January and October 2024.
That figure is separate from the more than $300 million (£226.53 million) value prosecutors attribute to the export-controlled servers involved in the wider alleged operation.
How Prosecutors Say the Servers Reached China
In January 2024, Lui allegedly received information that a Malaysian transshipment company wanted 70 servers containing export-restricted GPUs.
Prosecutors allege that the equipment did not remain in Malaysia. In March 2024, a co-conspirator allegedly emailed a Malaysian government official stating that the 27 servers had been transshipped to a buyer in China. Prosecutors cite the email as part of their allegations that the servers were ultimately sent to China.
The case is the latest in a series of US federal prosecutions targeting the alleged diversion of advanced computing technology to China. Washington introduced tighter controls on advanced computing technology exports to China in 2022, with Nvidia's high-performance GPUs among the products affected by subsequent restrictions.
Lui faces three federal counts: conspiracy to violate the Export Control Reform Act and related regulations, outbound smuggling, and conspiracy to commit money laundering.
The statutory maximum is 20 years for the export-control conspiracy, 10 years for the smuggling charge and 20 years for the money-laundering conspiracy. Those are maximum penalties set by law, not a prediction of the sentence he would receive if convicted.
The Justice Department said the case was investigated by the Department of Commerce's Bureau of Industry and Security, the Defense Criminal Investigative Service and the FBI. Lui's initial court proceedings were scheduled in federal court in Los Angeles.
The DOJ has stressed that an indictment is merely an allegation and that the defendant is presumed innocent unless proven guilty beyond a reasonable doubt. Reuters reported that Lui could not be reached for comment and that Earthmade Computer did not immediately respond to a request for comment.
