Federal authorities arrested California tech CEO Greg Lui on October 1, 2026, charging him with smuggling over $300 million in restricted computer servers containing Nvidia A100 and H100 chips to China. Prosecutors allege Lui bypassed U.S. export controls from 2023 to 2026 by routing shipments through Malaysia and Singapore using fraudulent documents. The case intensifies scrutiny on Nvidia's compliance protocols and highlights the ongoing geopolitical struggle between the U.S. and China for artificial intelligence dominance.
Arrest and charges of Greg Lui
- ▪Federal authorities arrested Greg Lui, the 38-year-old owner of Earthmade Computer Inc., on October 1, 2026, for allegedly smuggling over $300 million of restricted computer servers to China.
- ▪Greg Lui faces federal charges of conspiracy to violate the Export Control Reform Act, outbound smuggling, and conspiracy to commit money laundering, carrying a maximum statutory penalty of 50 years in prison.
Details of the smuggling operation
- ▪Earthmade Computer Inc. received over $176 million from two Malaysia-based shipping companies in 2024 as part of the alleged server smuggling scheme.
- ▪From October 2023 to August 2026, Greg Lui and co-conspirators allegedly used Earthmade Computer Inc. to purchase export-controlled servers and ship them to China without required U.S. Department of Commerce licenses.
- ▪The indictment alleges Greg Lui provided false documentation claiming the servers were destined for Malaysia and Singapore, then used freight-forwarding firms to illegally re-export the hardware to China.
- ▪In January 2024, Greg Lui purchased 27 servers containing Nvidia H100 chips for $7.6 million, shipped them to Malaysia, and a co-conspirator subsequently emailed a Malaysian official confirming they went to China.
Nvidia's chips and oversight
- ▪U.S. officials and industry experts have raised concerns over gaps in Nvidia's due diligence, pointing to instances where Nvidia authorized bulk shipments to inadequate facilities or sites using fake leases.
- ▪The smuggled servers contained Nvidia A100 and H100 graphics processing units, which are restricted chips optimized to handle large language models and train artificial intelligence applications.
- ▪An Nvidia spokesperson downplayed the impact of smuggled hardware, stating that less than one half of one percent of Nvidia products have been diverted to China, describing it as a drop in the bucket.
U.S. Export Control policies
- ▪President Donald Trump relaxed some export controls in late 2025, authorizing Nvidia to sell its H200 chip in China in exchange for a 25% revenue share.
- ▪The United States has implemented and repeatedly tightened export controls on advanced-computing chips since October 2022 to prevent China from utilizing U.S. technology to enhance its military and technological capabilities.
Trump's approach to AI
- ▪President Donald Trump signed an executive order in late September 2026 rebranding artificial intelligence as 'super intelligence' and rebuffed calls for domestic AI regulation to avoid hampering economic growth.
- ▪President Donald Trump has accused leading Chinese firms, such as DeepSeek, of stealing United States technology to quickly expand Chinese artificial intelligence capabilities.
Debatable claims
- ▪Nvidia's customer due diligence is insufficient to prevent the smuggling of its chips
- ▪Donald Trump's relaxation of chip export controls for Nvidia undermines US national security
- ▪US chip export controls are failing to contain Chinese AI development
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