The owner of a Southern California computer company was arrested on Thursday, Oct. 1, on charges that he smuggled more than $300 million worth of high-end servers to China. The servers held American-made GPUs, which are advanced AI chips, the hardware AI models are trained and run on. The Justice Department says Greg Lui, 38, of San Gabriel, used false paperwork and shipments through Malaysia and Singapore to get them past U.S. export rules. An indictment is only an accusation, and Lui is presumed innocent.
The United States does not let companies ship its most powerful AI chips to China without a license from the Commerce Department. Under U.S. rules, such chips could add significantly to another country's military strength. The license is not needed to send the same servers to countries such as Malaysia and Singapore, and prosecutors say Lui's scheme ran through that gap. From 2023 to 2024, they say, his company, Earthmade Computer Inc., near Los Angeles, falsely told U.S. manufacturers the servers were going to buyers and places that needed no license, shipped them to Malaysia and Singapore, and then had them sent on to China.
The indictment, returned on Sept. 29, describes one deal step by step. In January 2024, Lui ordered 27 servers from a U.S. manufacturer for about $7.6 million, roughly $282,000 each, and had them shipped from Los Angeles to Kuala Lumpur. The packing list said the machines held chips that could not go to China without a license. In March, prosecutors say, a co-conspirator emailed a Malaysian government official that the 27 servers had in fact gone to a buyer in China. Between January and October 2024, Earthmade received more than $176 million from two shipping companies based in Malaysia.
Lui faces three charges: conspiring to break U.S. export law, smuggling goods out of the country, and conspiring to launder money. Together they carry up to 50 years in prison. The department's statement does not name the chipmaker, saying only that the chips came from companies that specialize in AI computing; according to a news report, they were made by Nvidia.
The statement calls the technology "Super Intelligence," the name a Sept. 29 executive order told federal agencies to use in place of "artificial intelligence." Under the order, the term covers exactly what U.S. law already calls artificial intelligence. It does not mean AI smarter than people, which no one has built. "SI is the defining technology of the era," said John A. Eisenberg, who heads the department's National Security Division.
The department has not named the buyers in China or Lui's co-conspirators, or said how many servers the $300 million covers. An FBI counterintelligence official said Lui allegedly sold "the Chinese government" hundreds of millions of dollars' worth of American AI technology, but the department has not said who in the Chinese government bought the servers. Lui was due in federal court for a first appearance and arraignment on the day of his arrest, and how he has pleaded has not been made public.