California Tech CEO Arrested for Allegedly Smuggling $300 Million in AI Chips to China

Federal agents arrested Greg Lui, a 38-year-old California tech CEO, on Wednesday for allegedly orchestrating a scheme to smuggle over $300 million worth of restricted artificial intelligence chips into China. Lui, the founder and operator of Earthmade Computers, faces federal charges for violating U.S. laws, with potential implications for national security.

Agents from the FBI and the Department of Commerce apprehended Lui at the City of Industry headquarters of Earthmade Computers. He was taken into custody at gunpoint shortly after arriving at work in his Tesla Cybertruck. Prosecutors allege that Lui and his associates used Earthmade Computers to procure and export sensitive AI technology to China between 2023 and 2024 without the necessary licenses from the Department of Commerce, which are designed to protect U.S. foreign policy interests and national security.

Instead of adhering to export regulations, the alleged scheme involved shipping the restricted technology, including high-end computer servers with processors made by Nvidia Corp., to countries like Malaysia and Singapore. From these locations, the items were then allegedly re-exported to China. This process circumvented U.S. export control laws, as licenses are not required for shipments to Malaysia and Singapore. Federal regulations classify such technology as capable of making significant contributions to military advancements, raising concerns about its potential use by the Chinese military.

Prosecutors claim that Lui and his co-conspirators employed fraudulent documentation to misrepresent the final destinations of the AI technology in their orders with suppliers. Following these illicit shipments, Lui reportedly used bank accounts at JP Morgan Chase and Bank of America in Los Angeles to manage financial transactions related to the scheme.

Evidence presented by prosecutors includes an email from January 2024 where Lui allegedly discussed a Malaysian transshipment company's interest in purchasing 70 computer servers containing controlled AI technology. In the communication, he reportedly acknowledged the laws prohibiting such sales. Shortly thereafter, Lui allegedly purchased 27 of these servers for approximately $7.6 million and shipped them from Los Angeles to Kuala Lumpur, Malaysia. Court documents indicate that two months later, a conspirator informed a Malaysian official via email that the servers had indeed been rerouted to China.

From January to October 2024, Earthmade reportedly received over $176 million from two Malaysia-based shipping companies involved in the operation, according to court filings.

Lui faces charges including conspiracy to violate the Export Control Reform Act, smuggling, and conspiracy to commit money laundering. If convicted, he could face a maximum sentence of 50 years in prison.

The investigation is being conducted by the U.S. Department of Commerce, the Defense Criminal Investigative Service, and the FBI.

According to his LinkedIn profile, Lui has an eight-year career in the tech industry. He began his career at Amplitude Tech Hosting Service, a Denver-based firm, before founding Earthmade Computer in 2021. Earthmade Computer's services include database colocation, as well as procurement and export of computer processors. Investigators believe Lui used this company to conduct the alleged illegal activities, amassing wealth that allowed him to own a nine-bedroom mansion in San Gabriel valued at nearly $2 million.

Prior to his career in technology, Lui worked in the restaurant industry, specializing in Sichuan Chinese cuisine. He co-founded Duo-Pot in Arcadia in 2012, a restaurant that served hot pot and dry pot dishes, including spicy frog items, before closing in 2021.