California man arrested for allegedly smuggling $300 million in AI chips to China

Federal authorities arrested California resident Greg Lui on October 1, 2026, for allegedly smuggling over $300 million in Nvidia AI chips to China. Lui allegedly used his company, Earthmade Computer Inc., to route restricted servers through Malaysia and Singapore to bypass US export controls. He faces up to 50 years in prison. US officials emphasize that the illicit transfer of advanced semiconductor technology threatens national security, while Nvidia reiterates its cooperation with law enforcement.

Arrest and charges against Greg Lui

• ▪Federal prosecutors charged Greg Lui with conspiracy to violate the Export Control Reform Act, outbound smuggling, and conspiracy to commit money laundering, carrying a potential combined sentence of 50 years in prison
• ▪Greg Lui was scheduled to make his initial court appearance and be arraigned on October 2, 2026, in the United States District Court in Los Angeles, California
• ▪Federal authorities arrested Greg Lui, also known as Yiu Kong Lui, of San Gabriel, California, on October 1, 2026, for allegedly smuggling over $300 million in Nvidia artificial intelligence chips to China

Alleged smuggling scheme through Earthmade Computer Inc.

• ▪From 2023 to 2024, Greg Lui allegedly used his company, Earthmade Computer Inc., to ship export-controlled servers to Malaysia and Singapore, where they were illegally re-exported to China
• ▪Greg Lui's company, Earthmade Computer Inc., allegedly received over $180 million from Malaysian shipping companies to broker chip deals while lying to United States manufacturers about the final destination of the chips

Legal proceedings

• ▪According to court records, Yiu Kong Lui has not yet entered a plea of guilty or not guilty to the federal charges of export control violations, smuggling, and money laundering
• ▪The arrest of Greg Lui is part of a series of federal prosecutions by the United States targeting the smuggling of advanced American computing technology to China

United States export controls on semiconductor technology

• ▪The United States restricts advanced computing technology exports to prevent China from acquiring chips that could strengthen its military capabilities and to maintain competitiveness in the artificial intelligence sector
• ▪In 2025, United States President Donald Trump departed from the previous administration's policy under President Joe Biden by allowing Nvidia to sell certain semiconductor chips to China
• ▪United States export controls prohibit the export of advanced semiconductor chips and graphics processing units to China without a license issued by the United States Department of Commerce

Export Control policies

• ▪Roman Rozhavsky, an assistant director of the FBI's counterintelligence and espionage division, and other United States officials stated that smuggling advanced semiconductor technology to China compromises national security, risking homeland defense, and controlling exports safeguards economic security
• ▪The previous United States policy under President Biden, before Donald Trump's 2025 policy change, effectively blocked all exports of advanced semiconductor chips to China

Debatable claims

• ▪The US should completely ban the export of advanced AI chips to China
• ▪Export controls on AI chips will ultimately fail to slow China's AI development
• ▪A 50-year prison sentence for export control violations is disproportionate
• ▪US tech companies bear primary responsibility for preventing their products from being smuggled to China