California Tech CEO Arrested Over $300M Nvidia Server Smuggling to China

US federal agents arrested Greg Lui, the 38-year-old owner of California technology company Earthmade Computer Inc., on October 1, 2026. A three-count indictment accuses him of smuggling more than $300 million worth of export-controlled computer servers fitted with Nvidia graphics processing units (GPUs) to China. According to local media reports, the arrest took place at Earthmade's headquarters in City of Industry, east of Los Angeles. The US Department of Justice announced the case the same day.

A federal grand jury in Los Angeles returned the indictment on September 29, 2026. Lui, also known as Yiu Kong Lui and a resident of San Gabriel, is charged with conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering. The two conspiracy counts each carry a maximum sentence of 20 years in prison and the smuggling count carries up to 10 years. Prosecutors are also seeking the forfeiture of proceeds and property linked to the alleged scheme.

According to the indictment, the conspiracy began no later than October 2023 and continued until at least August 12, 2026, although the transactions described in detail all date from 2024. Earthmade, incorporated in November 2023, bought high-end AI servers from three US manufacturers that are not named in the court filing. Prosecutors say Lui and his co-conspirators gave these manufacturers false paperwork stating that the end users were located in countries where no US export license is required. Freight forwarders then shipped the servers to Malaysia and Singapore, and from there the equipment was re-exported to China, including Hong Kong.

The servers allegedly contained Nvidia A100 and H100 data center chips as well as RTX 4090 and RTX 5090 graphics cards, all of which require a license for export to China. Prosecutors state that neither Lui nor Earthmade ever applied for one.

The indictment says Earthmade received more than $176 million between January and October 2024 from two Malaysian companies used as transshipment points, about $80 million from the first and $96 million from the second. The first was a firm founded in 1999 whose main business was lumber, plywood and wood panels. The second is described as a front company. In return, Earthmade allegedly brokered the sale of almost $300 million worth of servers containing Nvidia GPUs. The buyer named in the examples is an unidentified industrial company based in Hangzhou, China.

Three transactions illustrate the alleged method. On January 11, 2024, Lui emailed a broker to say that the first Malaysian company wanted 70 servers with H100 chips, and attached compliance forms showing that the buyer knew about US restrictions on re-export to China. On January 30, 2024, he ordered 27 H100 servers for about $7.6 million, and the shipment left Los Angeles County for Kuala Lumpur the next day. On March 12, 2024, a co-conspirator emailed a Malaysian government official that the 27 servers had in fact been transshipped to the Chinese buyer.

In a second case, Lui ordered 512 servers from another manufacturer on May 1, 2024. On June 15, 2024, 92 of them were flown from San Francisco to Kuala Lumpur and then on to Hong Kong, with the Chinese company listed as consignee. On July 2, 2024, a US front company placed an order worth more than $22 million with a third manufacturer for 100 servers containing H100 chips. Prosecutors allege that Lui used identity documents purchased from another person to pose as the head of a second California company, Topmost Corp, which was presented as the buyer.

Lui is the only defendant. The indictment refers to five unindicted co-conspirators, including a sales manager at one of the US manufacturers, an executive at a US freight forwarder and the chief executive of the first Malaysian company. No server manufacturer is charged and Nvidia is not accused of wrongdoing.

Lui was due to make his first court appearance and be arraigned on October 2, 2026 in US District Court in downtown Los Angeles. Prosecutors asked in a court filing that he be held without bail, citing a serious risk of flight. As of October 2, no plea or detention ruling had been reported, and the court docket did not yet list a defense lawyer. An indictment is an allegation and Lui is presumed innocent unless proven guilty.

The investigation is being conducted by the Commerce Department's Bureau of Industry and Security, the Defense Criminal Investigative Service and the FBI. An FBI official said in the announcement that the hardware was sold to the Chinese government, an allegation that has not been tested in court.

The case is the latest in a series of prosecutions targeting the diversion of US AI hardware through Southeast Asia. In August 2025, prosecutors in Los Angeles charged two Chinese nationals living in Southern California with shipping tens of millions of dollars of Nvidia chips to China through Malaysia and Singapore. On March 19, 2026, prosecutors in New York charged Super Micro Computer co-founder Yih-Shyan Liaw and two others over the alleged diversion of about $2.5 billion in Nvidia-powered servers. Liaw pleaded not guilty on April 1, 2026 and the court set a trial date of November 2, 2026. On August 24, 2026, prosecutors in Taiwan indicted nine people, including employees of Nvidia and Super Micro, over 130 AI servers, of which 74 reached China and 56 were seized at the border.

US controls on advanced AI chips for China date from October 2022 and were widened in late 2023. Since January 2026, Washington has reviewed license applications for Nvidia's older H200 chip on a case-by-case basis for approved Chinese customers, while newer generations remain restricted. In late May 2026, the Commerce Department issued guidance confirming that license requirements also cover companies headquartered in China when they operate in third countries such as Malaysia. Malaysia itself has required a trade permit for the export, transshipment or transit of US-origin high-performance AI chips since July 2025.

For the AI hardware supply chain, the indictment highlights the points where diversion allegedly went undetected: end-user declarations accepted by manufacturers, export filings prepared by freight forwarders, and trading companies in transit countries with no obvious need for AI servers. The succession of cases is increasing compliance pressure on server makers, distributors and logistics providers that handle Nvidia-based systems routed through Malaysia and Singapore, which can mean longer customer checks and more documentation for legitimate buyers in the region.