Federal agents arrested Greg Lui, 38, on a three-count indictment accusing him of smuggling more than $300 million in export-controlled computer servers to China.
The big picture: Lui owns Earthmade Computer, a technology company in City of Industry, California. The Justice Department says that from 2023 to 2024 he bought high-end servers containing US-made GPUs and shipped them to countries such as Malaysia and Singapore, where no license is required, for onward delivery to China.
- Earthmade received more than $176 million from two Malaysia-based shipment companies between January and October 2024, according to the indictment.
Zoom in: In January 2024 Lui submitted a purchase order to a US manufacturer for 27 of the servers, worth about $7.6 million, and had them shipped from Los Angeles to Kuala Lumpur. Two months later a co-conspirator emailed a Malaysian official that the 27 servers had gone on to a China-based buyer.
What they're saying: "The National Security Division will protect the American advantage in the chips that power this technology, a product of our unparalleled innovation and hard work, from illegal diversion by our economic and military adversaries," said Assistant Attorney General John Eisenberg.
- FBI Assistant Director Roman Rozhavsky said the investigation showed Lui sold the Chinese government hundreds of millions of dollars worth of American technology in clear violation of US export control laws.
Yes, but: An indictment is an allegation, and Lui is presumed innocent. He faces up to 20 years on the conspiracy count, 20 on money laundering and 10 on smuggling.
Why it matters: Export controls on advanced chips are the main lever Washington uses to slow China's AI buildout, and this case puts a dollar figure on how much slipped through third countries in a single alleged scheme.
