California Man Accused of Smuggling $300 Million in AI Computer Chips to China

A man from the San Gabriel Valley in California was arrested Thursday after federal prosecutors accused him of smuggling more than $300 million worth of restricted computer hardware to China. Greg Lui owns a technology company called Earthmade Computer Inc., located in the City of Industry. Authorities say he sold powerful computer servers to the Chinese government while lying about where the products were going. The case raises big questions about national security and the race between the United States and China to lead in artificial intelligence technology.

Prosecutors say Lui told chip manufacturers that the servers were being sent to customers in Malaysia and Singapore. Those two countries do not require a special export license to receive this type of hardware from the U.S. China, however, does require one — and Lui did not have it. Instead, according to the indictment, he used shipping companies to secretly move the servers from Malaysia and Singapore on to China.

The servers contained powerful chips made by Nvidia, a company based in Santa Clara, California. Two of the chips named in the case are called the A100 and the H100. These chips are strong enough to power artificial intelligence programs that can write text, create images, generate video, and even write computer code. The H100, released in 2022, is especially useful for running large AI language models.

Court documents describe one example in detail. A purchase order showed that 27 servers loaded with Nvidia H100 chips were bought for about $7.6 million. Shipping records showed the servers left the Los Angeles area and traveled to Kuala Lumpur, the capital of Malaysia. But shortly after, a co-conspirator of Lui's emailed a Malaysian government official to say all 27 servers had actually been sent to China.

In 2024 alone, Earthmade received more than $176 million from two Malaysia-based shipping companies as part of the scheme, prosecutors said. Lui has been charged with three crimes: conspiracy to violate export controls, outbound smuggling, and conspiracy to commit money laundering. Each of these charges is serious and could lead to prison time if he is found guilty. As of now, no attorney has been listed in court documents to speak on his behalf.

Officials from the U.S. Justice Department say cases like this threaten America's national security. 'Protecting America's national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries' military capabilities,' said First Assistant U.S. Attorney Bill Essayli. He added that the government will strongly go after anyone who risks national security for personal gain. This kind of statement shows how seriously the U.S. takes the issue of technology falling into the wrong hands.

The word 'artificial intelligence,' or AI, has been in the news a lot lately. This week, President Trump signed an executive order renaming it 'super intelligence,' which caused some debate. Some people who work in AI had warned about the dangers of the technology growing too fast, but Trump's order pushed back against calls for strict regulation. He said such rules would slow down economic growth and hurt America's ability to compete with other countries.

The U.S. government first placed restrictions on chip exports to China in 2022, worried that China could use the technology to build a stronger military. After those rules were put in place, Nvidia created less powerful versions of its chips so it could still sell to China legally. But even those weaker chips were eventually restricted too. Late last year, Trump said he authorized Nvidia to sell its newer H200 chip in China, though exports in general are still heavily limited.

This is not the first time someone has been charged with illegally sending AI chips to China. Last year, federal prosecutors charged two Chinese nationals living in Southern California with exporting tens of millions of dollars' worth of AI microchips to China without permission. The repeated nature of these cases shows that smuggling advanced technology is an ongoing problem. Lawmakers and law enforcement agencies are paying close attention as the AI industry continues to grow rapidly.