Feds Arrest California Tech CEO Over Alleged $300M Nvidia Chip Smuggling Ring to China

Federal agents arrested a Southern California tech executive on Thursday, accusing him of quietly funneling roughly $300 million worth of restricted Nvidia AI servers into China. Greg Lui, 38, of San Gabriel, owns Earthmade Computer Inc. in the City of Industry, and he now faces a three-count federal indictment.

The charges are conspiracy to violate the Export Control Reform Act, outbound smuggling, and conspiracy to commit money laundering. Washington has spent years trying to keep high-end AI chips out of Chinese hands. This case suggests some of them walked right out the door anyway.

How the alleged scheme worked

Prosecutors say that between 2023 and 2024, Lui bought servers packed with Nvidia AI GPUs, hardware that requires a Commerce Department license to ship to China. No licenses were obtained, according to the indictment.

To get around that, the government says false paperwork was handed to manufacturers misrepresenting where the machines would end up. The servers were then allegedly routed through Malaysia and Singapore before reaching China, a transshipment pattern export-control officials have warned about for years.

What he is facing

The stakes are steep. A conviction on all counts could bring up to 20 years in prison on each of the two conspiracy charges and up to 10 years on the smuggling charge, as the New York Post reported. The charges are allegations, and Lui has not been convicted of anything.

The arrest lands in a tense moment for US and China relations over AI. Talk of a US-China superintelligence hotline sits alongside accusations that Chinese labs are distilling US models to catch up. Chips remain the bottleneck export controls are built around, which is why prosecutors treat cases like this one as national security matters.

The headline number is what makes the case stand out. At roughly $300 million in GPU servers, the alleged shipments add up to serious AI computing power landing exactly where US rules say it should not.