Full Breakdown
California Tech CEO Arrested for Alleged $300 Million AI Server Smuggling
By Drooid · · How we work
Core Event: Arrest and Federal Charges
On October 1, 2026, federal authorities arrested Greg Lui, 38, owner of Earthmade Computer Inc. in City of Industry, California. Prosecutors allege Lui used false paperwork and freight forwarders to ship U.S.–made GPUs to China without export licenses. The grand-jury indictment returned on September 29 charges him with conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering. He is scheduled to appear for arraignment on October 2 in Los Angeles federal court.
Background & Context: U.S. Export Controls on AI Hardware
Since the early 2020s, the United States has expanded export controls on advanced AI chips and the servers that house them to limit China’s ability to incorporate the technology into military systems. Violations are treated as national-security offenses because the equipment can enhance foreign armed forces.
Timeline
- 2023-2024 – Earthmade purchases and ships AI-grade servers to Malaysia and Singapore, then re-exports them to China.
- Jan-Oct 2024 – Earthmade receives more than $176 million from two Malaysia-based shipment companies for the scheme.
- Sept 29 2026 – Grand jury returns the indictment.
- Oct 1 2026 – Authorities arrest Lui and seize evidence at Earthmade’s headquarters and his residence.
- Oct 2 2026 – Scheduled arraignment in Los Angeles.
Data & Statistics
- Value of smuggled servers: over $300 million.
- Payments to freight partners: more than $176 million between Jan 2024 and Oct 2024.
- Server details: Nvidia GPUs; one transaction involved 27 servers valued at roughly $7.6 million.
Official Statements & Responses
First Assistant U.S. Attorney Bill Essayli said protecting America’s “advanced Super Intelligence technology” is a priority and that the government will “aggressively prosecute” profit-driven violations. The DOJ press release described the scheme as a coordinated effort to conceal the true Chinese destination of the servers.
Conflicting Reports & Gaps
- Maximum prison term: The Guardian and NY Post cite up to 50 years; other outlets note a maximum of 20 years for conspiracy counts and 10 years for smuggling.
- Exact GPU models: Only Softonic identifies the H100 model; other sources do not specify.
- Buyer identities: Court filings allege some Chinese buyers were linked to the government, but no public list is available.
Verbatim Quotes
- “Controlling the export of advanced [super intelligence] technology is critical to safeguarding our national security and defending the homeland, and the FBI will keep fighting for America’s businesses and economic security,” — Assistant Director Roman Rozhavsky.
What’s Next
Lui’s first court appearance is set for October 2, where he will enter a plea. The Justice Department, the Department of Commerce’s Bureau of Industry and Security, the Defense Criminal Investigative Service, and the FBI have indicated ongoing investigations into additional participants and related shipments.
