The US Department of Justice indicts a CEO for smuggling $300 million in AI chips to China, enforcing export-control restrictions on advanced semiconductors.
The United States Department of Justice announced the arrest of Greg Lui, CEO of Earthmade Computer, on October 1st, accused of conspiring to smuggle export-controlled NVIDIA graphics processing units (GPUs) destined for China. According to the DOJ statement and reporting by Ars Technica, Lui used false paperwork to conceal shipments of high-end servers containing the GPUs, which were ultimately diverted to China. GPU chips—technology originally designed for computer gaming—have become critical infrastructure for emerging technologies including artificial intelligence. The US regulates trade in such chips through export control laws.
The DOJ indictment alleges that the export scheme ran from October 2023 through August 2026, involving freight-forwarding firms in Malaysia and Singapore. According to the charges, Lui submitted purchase orders for servers while misrepresenting their destination as Malaysia, although they were actually shipped to a Chinese firm in Hangzhou. Subsequent shipments totaling 92 and 100 servers were allegedly routed through Singapore and Malaysia before reaching Hong Kong.
The DOJ's evidence includes emails, bank records from Bank of America and JPMorgan Chase accounts, and documentation misidentifying Lui as "Jackie Lui." Lui faces three counts: conspiracy to violate the Export Control Reform Act and Export Administration Regulations, federal smuggling, and money laundering. If convicted, the conspiracy and money-laundering charges each carry a maximum sentence of 20 years, while the smuggling charge carries up to 10 years.
The case underscores intensifying enforcement of US export controls on advanced semiconductor technology used in AI applications. NVIDIA has claimed that less than half of one percent of its products have been diverted to China, while other experts note that the broader market for AI chips falling outside US export controls remains difficult to quantify.