US arrests tech CEO over alleged $300M Nvidia chip smuggling scheme to China
The US Department of Justice has arrested Earthmade Computer CEO Greg Lui, accusing him of using fraudulent paperwork to route export-controlled Nvidia chips worth over $300 million into China. The case renews scrutiny of Nvidia's own compliance gaps in catching such smuggling schemes.
US authorities have arrested another individual accused of illegally funneling computer servers containing export-restricted Nvidia chips to China. The Department of Justice announced Thursday that 38-year-old Greg Lui, CEO of Earthmade Computer, allegedly used falsified documents to disguise shipments ultimately bound for China.
According to FBI allegations, Lui worked with freight-forwarding companies in Malaysia and Singapore to divert shipments of Nvidia A100 and H100 GPUs toward China. While these aren't Nvidia's most advanced chips, they can process large datasets and train large language models, raising US national security concerns about accelerating China's AI or military capabilities.
Evidence of the scheme
Investigators cited emails and bank records showing the scheme ran from October 2023 through August 2026. In one instance, 27 servers worth roughly $7.6 million were ordered under false pretenses claiming a Malaysian destination but allegedly shipped to China instead. In another case, 92 controlled servers were routed through Singapore and Hong Kong before reaching a company in Hangzhou, China. A separate shipment involved 100 servers containing H100 GPUs worth over $22 million, allegedly using fraudulent documents from a fabricated buyer.
Lui's firm is alleged to have received more than $176 million from the scheme in 2024 alone. He faces three charges, including violations of export control laws and money laundering, carrying penalties of up to 20 years in prison.
Questions about Nvidia's oversight
The arrest follows a similar case involving a Nvidia employee in Taiwan linked to a smuggling scheme. An Nvidia spokesperson said less than half a percent of its products have been diverted to China, noting that Chinese AI development is now largely powered by Huawei chips instead. However, experts and officials argue Nvidia has repeatedly failed to flag obvious red flags, including cases in Taiwan and Thailand involving undersized facilities and fake leases used to justify bulk chip orders.
