Greg Lui, owner and CEO of California-based Earthmade Computer Inc., was arrested Thursday after federal prosecutors accused him of helping divert export-controlled servers they value at more than $300 million to China. The case puts an alleged breach of controls on AI-related computing hardware before a court, but the shipments and Lui’s role in them have not been proved.
A federal grand jury returned a three-count indictment Tuesday, according to the Justice Department. Lui is charged with conspiracy to violate U.S. export controls, outbound smuggling and conspiracy to commit money laundering. His arrest is confirmed; the charges are allegations, not a finding of guilt.
Prosecutors say the servers contained U.S.-manufactured graphics processing units, or GPUs, chips used for computing tasks that include AI. The Los Angeles Times reported, citing the indictment, that Nvidia A100 and H100 chips were among those Lui is accused of exporting. The Justice Department’s public announcement does not name a chipmaker, and the reported charges do not accuse Nvidia of wrongdoing.
The more-than-$300-million figure is the government’s alleged value of the servers. It is not a court finding, a measure of payments to Earthmade or a valuation of the Nvidia chips alone.
What prosecutors allege about Lui’s role
Prosecutors say Lui and alleged co-conspirators used Earthmade in 2023 and 2024 to obtain controlled servers for China without required U.S. licenses. They allege that false paperwork and shipments through other countries concealed the intended destination. Whether Lui knew and participated in the alleged diversion remains a question for the court.
The Justice Department says the exports it describes required licenses from the U.S. Commerce Department because the servers were destined for China. The indictment alleges that China was the intended destination and that Lui helped arrange the shipments. Those allegations remain unproved.
One purchase order cited by prosecutors covered 27 servers valued at approximately $7.614 million. They allege those servers ultimately reached a buyer in China. The purchase order is a specific example in the government’s account, not independent confirmation of where the equipment ended up.
Prosecutors also say Earthmade received more than $176 million from two shipment companies between January and October 2024 as part of the alleged scheme. That payment figure measures something different from the government’s valuation of the servers. Neither amount has been established by a court.
The indictment describes what prosecutors say Lui arranged as Earthmade’s owner and CEO. It does not establish what manufacturers, freight handlers or other intermediaries knew about the alleged final destination. Nor does one prosecution show how frequently controlled servers are diverted.
What the arrest means for chip export controls
U.S. restrictions on chip exports to China began in 2022, the Los Angeles Times reported. The paper also reported that Nvidia later designed less-powerful chips for that market before those models, too, became restricted. That broader policy history does not establish the legal status of every server in Lui’s case; the alleged violations charged here remain unproved.
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The case highlights a challenge for export enforcement: authorities may need to establish where controlled hardware was ultimately meant to go, rather than relying only on an initial transaction. In this indictment, that destination is a central allegation. An arrest shows authorities have brought a case over it, not that the alleged diversion occurred or that export controls succeeded or failed overall.
The FBI, the Commerce Department’s Bureau of Industry and Security and the Defense Criminal Investigative Service investigated, according to the Justice Department. Federal officials describe enforcement of controls on advanced technology as a national security matter. The agencies’ involvement does not settle the facts alleged against Lui.
For companies that handle AI-related hardware, the allegation draws attention to the gap prosecutors say existed between the declared destination and the intended buyer. The available account does not establish that Nvidia or any other manufacturer knowingly violated export rules. It also does not establish the scale of any diversion beyond the conduct prosecutors allege in this case.
What penalties could Lui face?
The Justice Department lists separate statutory maximum prison terms for each charge. A conviction on the export-control conspiracy count could carry up to 20 years, as could a conviction on the money-laundering conspiracy count. The maximum for outbound smuggling is 10 years. Those are ceilings for individual counts, not an imposed sentence or a prediction of what Lui would receive if convicted.
Lui has not been convicted. Reuters reported that it could not reach him for comment and that Earthmade did not immediately respond to its request. The Los Angeles Times reported that it could not reach Lui and that no attorney was listed in the court documents it reviewed. Neither report establishes a defense position.
The timing of Lui’s first court appearance is unresolved in the available accounts. The Justice Department said he was expected to appear and be arraigned Thursday; Reuters reported an expected appearance and arraignment Friday. Neither account confirms that a hearing occurred or reports a plea. The charges remain allegations for the court to resolve.