'These Chips Are the Product of American Ingenuity': DOJ Just Busted a $300 Million Nvidia Server Smuggling Pipeline to China
In 60 seconds: Federal agents have arrested Greg Lui, 38, a California tech CEO, on charges that he smuggled more than $300 million worth of export-controlled servers loaded with Nvidia AI chips to China — routing them through Malaysia and Singapore with false paperwork. If convicted on all counts, he faces up to 50 years in prison.
- Greg Lui (also known as Yiu Kong Lui), 38, of San Gabriel, California, was arrested Oct. 1 on a three-count federal indictment: conspiracy to violate US export controls, outbound smuggling, and conspiracy to commit money laundering.
- Prosecutors say he used his company, Earthmade Computer Inc., to funnel more than $300 million in servers containing Nvidia A100 and H100 GPUs to China between 2023 and 2024, using Malaysia and Singapore as transshipment points.
- False documents allegedly masked China as the true destination; the Chinese buyer is described in the indictment as an industrial company in Hangzhou, with some buyers allegedly tied to the Chinese government.
- First Assistant US Attorney Bill Essayli: Lui "used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China."
- Lui faces up to 50 years in prison if convicted on all counts. The case follows a March indictment of a Super Micro co-founder in a similar Nvidia-diversion scheme — a pattern of federal crackdowns on the chip pipeline to China.
What happened
The Department of Justice has dropped the hammer on what it describes as one of the largest AI chip smuggling operations ever charged in the US. On Oct. 1, federal agents arrested Greg Lui, owner of the City of Industry-based Earthmade Computer Inc., after a grand jury returned a three-count indictment on Sept. 29. Lui was arraigned in Los Angeles federal court, where prosecutors argued for detention, calling him a "serious risk" of flight.
Assistant Attorney General for National Security John A. Eisenberg didn't mince words about the stakes: "These chips are the product of American ingenuity. The National Security Division will continue to enforce our export-control laws to protect that advantage." Prosecutors call the diverted hardware "super intelligence" technology — chips that could contribute to another country's military capabilities.
Latest verified facts
Here's how the alleged scheme worked, according to the DOJ and court filings. Lui's company bought hundreds of millions of dollars' worth of high-end servers from US manufacturers — including a single purchase order for 27 servers with Nvidia H100 GPUs worth about $7.6 million — then shipped them to Malaysia and Singapore, jurisdictions where the US export restrictions don't apply. From there, the servers were re-exported to China, with false documents misrepresenting the real end-users and destinations.
One shipment singled out in the filings: 92 servers that traveled from San Francisco International Airport to Kuala Lumpur, with the onward consignee listed as a Chinese customer. Court documents say Lui received more than $176 million in payments from two Malaysian transshipment companies for connecting them with US suppliers. The indictment describes the Chinese purchaser as an industrial company based in Hangzhou — one of China's major tech hubs — and filings allege some buyers were tied to the Chinese government.
The chips themselves were Nvidia's most restricted AI hardware: A100 and H100 GPUs, alongside RTX 4090 and 5090 cards — the exact processors Washington has spent years keeping out of Beijing's hands.
Why it matters
This is the AI arms race moving from trade policy into handcuffs. The US has spent three years tightening export controls on advanced chips to China — and the $300 million figure in this indictment is a measure of how much money is on the table for anyone willing to route around them. Prosecutors deliberately called the chips "super intelligence" technology, framing the case not as a customs violation but as a national-security matter.
It also follows a pattern: in March, a Super Micro co-founder was indicted in a Nvidia-diversion scheme involving billions of dollars in chips. The Lui case suggests the DOJ is working its way down the supply chain — from mega-deals to the mid-tier resellers and freight intermediaries that keep the gray market moving through Southeast Asia.
Impact on the USA and the world
For the American tech industry, the message is pointed: manufacturers and resellers now face criminal exposure if their chips end up in China through willful blindness. Expect tighter end-user screening from Nvidia's distribution chain and more scrutiny of freight forwarders in Malaysia and Singapore — the transshipment corridor this case exposed.
For China, every server that gets through is another brick in its domestic AI buildout. For the markets, cases like this keep the geopolitical risk premium on semiconductors alive: Nvidia's most advanced chips aren't just products anymore — they're strategic assets wrapped in trade policy, criminal investigations, and a growing gray market fueled by Chinese demand.
What happens next
Several things to watch: whether the court grants detention or bail for Lui; whether any co-conspirators — the Malaysian transshipment partners, the US suppliers — get named or charged; and whether the case reveals which Chinese entities, including alleged government-linked buyers, were receiving the servers. The FBI, the Commerce Department's Bureau of Industry and Security, and the Defense Criminal Investigative Service are all on the investigation, which usually means more charges are coming, not fewer.