Story
October 2, 2026
$300M Nvidia chip case tests whether export controls can hold
Prosecutors portray the case as a deliberate effort to defeat safeguards meant to keep powerful AI hardware out of China, while Nvidia argues that smuggling is both limited and a losing strategy—and that it is working with authorities to stop it.
Federal prosecutors have charged Greg Lui, the California-based chief executive of Earthmade Computer, over an alleged scheme to route more than $300 million in export-controlled Nvidia servers to China through Malaysia and Singapore.
The case, announced Thursday, centers on a familiar pressure point in Washington’s technology rivalry with Beijing: whether restrictions on advanced AI chips can survive a network of intermediaries, shell companies and misleading paperwork. Prosecutors say Lui and co-conspirators used overseas freight forwarders and false end-user documents to conceal that the servers’ final destination was China.1
According to the indictment, the operation began in October 2023 and continued until August 2026. One alleged 2024 transaction involved 70 servers nominally headed to Malaysia; Lui allegedly ordered 27 of them for about $7.6 million, after which a co-conspirator told a Malaysian official they had gone to China. Another shipment of 92 controlled servers allegedly traveled through Singapore and Malaysia before reaching Hong Kong and then a Hangzhou-based Chinese firm.2
Authorities say the stakes are national security as much as commerce. Advanced chips are central to training large AI models and operating data centers, and the FBI’s Roman Rozhavsky said controlling exports of advanced technology is “critical to safeguarding our national security and defending the homeland.”3
Lui faces allegations of export-control violations, smuggling and money laundering. He has not yet entered a plea, and it was not immediately clear whether he had legal representation. If convicted on every count, he could face a combined maximum sentence of 50 years.3
Nvidia, whose A100 and H100 GPUs were named in the allegations, cast the prosecution as evidence that enforcement can work. “This case shows yet again that smuggling is a losing proposition — legally, economically and technically,” a company spokesperson said, adding that Nvidia’s cooperation with law enforcement had helped lead to prosecutions.3
But the arrest also sharpens a harder question: whether detection is coming soon enough to prevent controlled hardware from reaching China—or only after the servers have already crossed the border.