California tech CEO seized in raid over $300 million AI chip smuggling scheme

Federal law-enforcement officials arrested Greg Lui, the founder and chief executive of Earthmade Computers, on charges of smuggling restricted AI chips valued at over $300 million into China. Agents raided the company’s City of Industry office while Lui arrived in a Tesla Cybertruck, handcuffing him at gunpoint. Court filings claim Earthmade bought Nvidia-made servers and routed them through Malaysia and Singapore to evade export licences mandated by the Department of Commerce, then re-exported the hardware to Beijing.

From January to October 2024 the scheme allegedly yielded more than $176 million from two Malaysia-based shipping firms, with money moving through accounts at JP Morgan Chase and Bank of America. Prosecutors say Lui knowingly falsified documents and coordinated the transshipments, charging him with conspiracy under the Export Control Reform Act, smuggling, and money-laundering conspiracy, each carrying up to 50 years in prison. The FBI, the Department of Commerce, and the Defense Criminal Investigative Service are handling the case.