Federal authorities have charged Greg Lui, the owner of Earthmade Computer Inc. in California, with orchestrating a scheme to smuggle more than $300 million in restricted computer servers containing U.S.-manufactured AI hardware to China, according to a newly unsealed indictment. The operation allegedly involved falsifying shipping documents and routing equipment through third countries to evade U.S. export controls.
Lui faces three federal counts, including conspiracy to violate export laws, outbound smuggling, and conspiracy to commit money laundering. The indictment, filed in the Central District of California, details transactions spanning from October 2023 to at least August 2024, during which servers equipped with Nvidia GPUs—critical components for AI development—were allegedly purchased in the U.S. and shipped to Malaysia and Singapore before being illegally re-exported to China. Prosecutors allege that payments from Malaysia were funneled into Earthmade’s U.S. bank accounts to fund the purchases.
The U.S. Department of Commerce requires export licenses for shipments of such high-end AI hardware to China but not to Malaysia or Singapore. An attorney for Lui has not yet been listed in court documents, and attempts to reach him for comment were unsuccessful. Earthmade Computer Inc. has not been charged in the case.
Federal prosecutors and Commerce Department officials framed the alleged scheme as a direct threat to national security, arguing that advanced AI technology could be used to bolster China’s military capabilities. In a Justice Department news release, First Assistant U.S. Attorney Bill Essayli stated, “Protecting America’s national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries’ military capabilities.” The term “Super Intelligence” reflects a recent executive order by President Trump, which rebranded AI-related technology under this new designation amid broader policy discussions.
The indictment also names five unindicted co-conspirators, including a sales manager at a U.S. server manufacturer and an executive at a U.S. freight-forwarding company, who allegedly facilitated the transactions. Prosecutors allege that false buyer information, misleading shipping records, and inaccurate export filings were used to conceal the ultimate destination of the hardware.
The case underscores ongoing tensions between the U.S. and China over semiconductor export controls, which have intensified as China accelerates its AI development. The U.S. has imposed restrictions on the export of advanced chips to China, including those produced by Nvidia, to limit Beijing’s access to cutting-edge technology. Despite these controls, enforcement efforts continue to uncover attempts to circumvent them.
The indictment’s timeline suggests the alleged conspiracy began in late 2023 and continued into mid-2024, with a concentration of activity in 2024. The servers in question are described as high-end systems containing graphics processing units (GPUs) commonly used in AI data centers. The stock of major chipmakers, including Nvidia, has experienced volatility in recent months, with a 16% decline from its May 14 peak amid broader market and policy uncertainties surrounding AI technology.
The case is being prosecuted in the Central District of California, where federal authorities have emphasized their commitment to aggressively pursuing violations of export controls. If convicted, Lui could face a maximum of 50 years in prison under the charges outlined in the indictment.