Federal Agents Arrested Founder for Smuggling AI Chips

Greg Lui faces charges after allegedly smuggling over $300 million in restricted Nvidia processors to China.

Updated on Oct. 1, 2026 in Semiconductors

Federal Agents Arrested Founder for Smuggling AI Chips

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Federal authorities arrested Earthmade Computers founder Greg Lui for allegedly orchestrating a scheme to smuggle restricted AI technology into China. Lui reportedly bypassed export controls by routing shipments through Malaysia and Singapore.

Why it matters

The investigation highlights ongoing federal efforts to enforce strict export controls on advanced semiconductors. These restrictions aim to prevent foreign entities from acquiring sensitive AI capabilities that could impact national security.

Lui allegedly processed over $300 million in prohibited hardware, including servers equipped with Nvidia Corp processors. The scheme involved misrepresenting shipments to circumvent licensing requirements for high-performance AI technology.

The players

Greg Lui

He is the founder of Earthmade Computers and a resident of San Gabriel who has been charged with conspiracy and smuggling.

Nvidia Corp

This is a global technology company known for designing the high-performance graphics processing units used in advanced AI servers.

Earthmade Computers

This company based in the City of Industry was allegedly used by its founder to purchase and export restricted technology.

The details

Lui used his company, Earthmade Computers, to purchase restricted servers and utilize freight forwarders to mask their final destination. Between January and October 2024, the business received more than $176 million from shipping companies involved in the transshipment operation.

Lui allegedly engaged in smuggling activities between 2023 and 2024.
In January 2024, Lui purchased 27 servers at a cost of $7.6 million.
Earthmade received $176 million from shipment companies between January and October 2024.
Federal agents arrested Greg Lui on September 30, 2026.

The Tech Race

This case follows a pattern set by the Export Control Reform Act to restrict foreign access to sensitive AI hardware. It underscores the intensifying global battle to control the supply of advanced processors necessary for artificial intelligence development.

This investigation demonstrates the tightening of oversight on tech hardware distribution, which may increase compliance requirements for firms handling advanced processors. Consumers might see slower availability of specific high-end hardware as distributors implement stricter verification processes.

The takeaway

The charges carry a potential 50-year prison sentence, highlighting the severity with which federal authorities treat the illegal export of critical technology. Companies must maintain rigorous compliance with international trade laws to avoid significant legal consequences.