Key facts
- US authorities arrested Greg Lui, CEO of Earthmade Computer, for allegedly smuggling Nvidia chips and servers into China.
- The smuggled goods are valued at over $300 million.
- Lui allegedly used false paperwork and freight-forwarding firms in Malaysia and Singapore to divert shipments.
- The US Department of Justice alleges the scheme began in October 2023 and continued until August 2026.
- Nvidia stated that less than 0.5% of its products have allegedly been diverted to China.
US authorities have arrested Greg Lui, the 38-year-old CEO of Earthmade Computer, accusing him of orchestrating a scheme to smuggle high-end computer servers containing export-controlled Nvidia chips into China. The Department of Justice stated on Thursday that Lui used false paperwork to mask shipments valued at over $300 million, which he allegedly knew were destined for China.
According to the FBI's indictment, Lui conspired with freight-forwarding firms in countries like Malaysia and Singapore to illegally divert chip shipments, including Nvidia's A100 and H100 GPUs. While these are not Nvidia's most advanced chips, their data processing and large language model training capabilities raise national security concerns for the US if China gains access to a significant quantity.
Evidence cited by the DOJ includes emails and bank records. One 2024 email reportedly discussed an order for 70 servers with export-restricted GPUs fraudulently claimed as destined for Malaysia. After Lui allegedly submitted a purchase order for 27 of these servers for approximately $7,614,000 to a US manufacturer, a co-conspirator allegedly informed a Malaysian government official that all 27 were shipped to China.
Another alleged shipment of 92 export-controlled servers was routed through Singapore to Malaysia and then Hong Kong, ultimately reaching a Chinese firm in Hangzhou, which The Wall Street Journal has described as China's AI hub. In another instance, Lui allegedly used fraudulent documentation from a fake buyer to ship 100 Malaysian-bound servers containing Nvidia H100 GPUs worth over $22 million, employing the identity of an individual whose documents he had purchased.
Lui's firm allegedly received more than $176 million from the scheme in 2024, with payment records from Bank of America and JP Morgan providing further evidence. The DOJ is seeking to seize all funds gained through the scheme. Lui faces up to 20 years in prison if convicted of conspiracy or money laundering charges, and up to 10 years for the smuggling charge.