US arrests man over alleged smuggling of $300 million computer servers to China

A California man has been arrested for allegedly smuggling more than $300 million worth of computer servers to China, the US Department of Justice said Thursday. Greg Lui, 38, allegedly used false paperwork and third countries to evade export rules. The servers contained US-made graphics processing units used for artificial intelligence (AI).

Who is Greg Lui and what is he accused of?

Greg Lui, 38, of California, also known as "Yiu Kong Lui," ran a technology company called Earthmade Computer Inc. The department said he bought and sent items to China without Commerce Department licenses between 2023 and 2024, using false paperwork and shipments through third countries.

How did the alleged smuggling of computer servers to China work?

According to the statement, the company shipped the items to countries including Malaysia and Singapore, where no such license is required. The items were then illegally re-exported to China.

The department said the servers contained "US-manufactured graphics processing units (GPUs) commonly used for Super Intelligence (SI)." The phrase is the Trump administration's new name for AI.

What did US officials say about the arrest?

"Protecting America's national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries' military capabilities," California prosecutor Bill Essayli said.

"We will aggressively prosecute those who put our national security at risk for profit," he added.

What could Greg Lui face if convicted?

If convicted, Lui could face a maximum of 50 years in prison.

Why does the US restrict advanced chip exports to China?

The United States has long tried to slow China's progress with export controls on the advanced chips needed for cutting-edge AI. The controls block access to top-end US semiconductors, such as those made by Nvidia.

China, long seen as trailing the United States on cutting-edge AI, has been closing that gap fast.