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Amid intensifying competition in the AI technology race, US authorities have arrested a California technology company owner accused of using Malaysia and Singapore as transit points to circumvent US export controls and send more than US$300 million worth of restricted computer servers to China.
Greg Lui, 38, also known as Yiu Kong Lui, of San Gabriel, was arrested on Thursday and charged with conspiracy to violate US export controls, outbound smuggling and conspiracy to commit money laundering, according to the US Justice Department.
John A. Eisenberg, assistant attorney general for national security, said the indictment details alleged efforts to evade US export laws through false documents and complicated transshipment schemes designed to conceal China as the true destination for restricted artificial intelligence technology.
“These chips are the product of American ingenuity,” Eisenberg said. “The National Security Division will continue to enforce our export-control laws to protect that advantage.”
The Chinese purchaser is described in the indictment as an industrial company based in Hangzhou. The city is a major Chinese tech hub.
The servers at the centre of the case contained US-manufactured Nvidia GPUs, including A100 and H100 chips, used in what the Justice Department calls “super intelligence” applications, technology that prosecutors said could contribute to the military capabilities of other countries.
ui, who owns City of Industry-based Earthmade Computer, allegedly bought hundreds of millions of dollars’ worth of high-end servers from US manufacturers and arranged for them to be shipped to third countries before being re-exported to China without the required licences.
Prosecutors said he and his co-conspirators used false documents to misrepresent the intended users and destinations, routing shipments through Malaysia and Singapore before they reached China.
In one example, Lui allegedly ordered 27 Nvidia H100 servers worth about US$7.6 million in January 2024.
The servers were shipped from Los Angeles County to Kuala Lumpur, and a Malaysian co-conspirator later told a government official that they had been transshipped to a Chinese buyer.
In another shipment, 92 export-controlled servers were flown from San Francisco International Airport to Kuala Lumpur in June 2024, before being sent on to Hong Kong.
Earthmade received more than US$176 million from two Malaysia-based transshipment companies between January and October 2024, prosecutors said.
The indictment alleges that Lui helped broker almost US$300 million worth of export-controlled Nvidia server sales through the Malaysian companies.
Nvidia confirmed the company was in cooperation with law enforcement.
“This case shows yet again that smuggling is a losing proposition — legally, economically and technically,” an Nvidia spokesperson said. “We will continue to engage with law enforcement.”
The arrest highlights a challenge for Washington as it tightens restrictions on advanced AI chips while Chinese companies access US-made computing power through infrastructure in third countries.
Separate concerns have also emerged in Washington over Chinese AI companies obtaining remote access to restricted Nvidia chips installed in data centres in Southeast Asia.
US export controls generally regulate the physical transfer of chips, potentially leaving a gap when the hardware remains overseas but Chinese companies can remotely access its computing power.
US lawmakers are pursuing legislation that would require tracking technology for advanced chips and expand oversight of their exports as they seek to curb smuggling and the diversion of AI servers to China.
The New York Post first reported that federal agents tracked Lui as he drove a Tesla Cybertruck from his San Gabriel home to Earthmade’s offices in a nearby industrial park, where agents arrested him at gunpoint shortly after he arrived.
Lui did not speak as he was placed in a vehicle for processing, according to the outlet, which published exclusive video of the arrest.
The outlet also reported that Lui’s “luxurious lifestyle” as he lived in a 4,300-square-foot, nine-bedroom mansion in San Gabriel. Federal agents searched the property after his arrest. Before entering the technology business, Lui was in the restaurant business.
If convicted on all charges, Lui faces a statutory maximum penalty of 20 years in prison for conspiracy, 20 years for money laundering, and 10 years for outbound smuggling.
Amid intensifying competition in the AI technology race, US authorities have arrested a California technology company owner accused of using Malaysia and Singapore as transit points to circumvent US export controls and send more than US$300 million worth of restricted computer servers to China.
Greg Lui, 38, also known as Yiu Kong Lui, of San Gabriel, was arrested on Thursday and charged with conspiracy to violate US export controls, outbound smuggling and conspiracy to commit money laundering, according to the US Justice Department.
John A. Eisenberg, assistant attorney general for national security, said the indictment details alleged efforts to evade US export laws through false documents and complicated transshipment schemes designed to conceal China as the true destination for restricted artificial intelligence technology.
“These chips are the product of American ingenuity,” Eisenberg said. “The National Security Division will continue to enforce our export-control laws to protect that advantage.”
The Chinese purchaser is described in the indictment as an industrial company based in Hangzhou. The city is a major Chinese tech hub.
The servers at the centre of the case contained US-manufactured Nvidia GPUs, including A100 and H100 chips, used in what the Justice Department calls “super intelligence” applications, technology that prosecutors said could contribute to the military capabilities of other countries.
ui, who owns City of Industry-based Earthmade Computer, allegedly bought hundreds of millions of dollars’ worth of high-end servers from US manufacturers and arranged for them to be shipped to third countries before being re-exported to China without the required licences.
Prosecutors said he and his co-conspirators used false documents to misrepresent the intended users and destinations, routing shipments through Malaysia and Singapore before they reached China.
In one example, Lui allegedly ordered 27 Nvidia H100 servers worth about US$7.6 million in January 2024.
The servers were shipped from Los Angeles County to Kuala Lumpur, and a Malaysian co-conspirator later told a government official that they had been transshipped to a Chinese buyer.
In another shipment, 92 export-controlled servers were flown from San Francisco International Airport to Kuala Lumpur in June 2024, before being sent on to Hong Kong.
Earthmade received more than US$176 million from two Malaysia-based transshipment companies between January and October 2024, prosecutors said.
The indictment alleges that Lui helped broker almost US$300 million worth of export-controlled Nvidia server sales through the Malaysian companies.
Nvidia confirmed the company was in cooperation with law enforcement.
“This case shows yet again that smuggling is a losing proposition — legally, economically and technically,” an Nvidia spokesperson said. “We will continue to engage with law enforcement.”
The arrest highlights a challenge for Washington as it tightens restrictions on advanced AI chips while Chinese companies access US-made computing power through infrastructure in third countries.
Separate concerns have also emerged in Washington over Chinese AI companies obtaining remote access to restricted Nvidia chips installed in data centres in Southeast Asia.
US export controls generally regulate the physical transfer of chips, potentially leaving a gap when the hardware remains overseas but Chinese companies can remotely access its computing power.
US lawmakers are pursuing legislation that would require tracking technology for advanced chips and expand oversight of their exports as they seek to curb smuggling and the diversion of AI servers to China.
The New York Post first reported that federal agents tracked Lui as he drove a Tesla Cybertruck from his San Gabriel home to Earthmade’s offices in a nearby industrial park, where agents arrested him at gunpoint shortly after he arrived.
Lui did not speak as he was placed in a vehicle for processing, according to the outlet, which published exclusive video of the arrest.
The outlet also reported that Lui’s “luxurious lifestyle” as he lived in a 4,300-square-foot, nine-bedroom mansion in San Gabriel. Federal agents searched the property after his arrest. Before entering the technology business, Lui was in the restaurant business.
If convicted on all charges, Lui faces a statutory maximum penalty of 20 years in prison for conspiracy, 20 years for money laundering, and 10 years for outbound smuggling.
