Tech CEO arrested over $300M Nvidia chip smuggling scheme

Federal authorities just pulled the plug on a $300 million scheme to sneak restricted Nvidia AI chips into China.

The Department of Justice arrested 38-year-old Greg Lui, CEO of Earthmade Computer, charging him with running a massive export evasion network. According to the DOJ, Lui used fake paperwork, stolen identities, and intermediate shipping hubs in Malaysia and Singapore to route servers packed with Nvidia A100 and H100 GPUs to a firm in Hangzhou, China. The operation reportedly netted over $176 million in 2024 alone using shell buyers like a fake executive named "Jackie Lui."

Why it matters: US export rules aim to keep top-tier AI hardware out of China to limit its AI and military capabilities. While Nvidia downplays the issue—calling diverted chips a "drop in the bucket"—federal investigators are increasingly calling out chipmakers for failing to catch obvious red flags in suspicious shipments.

Know this: Lui faces up to 20 years in prison if convicted of conspiracy or money laundering, plus up to 10 years on smuggling charges.

Expect US officials to press Nvidia and its partners to vet overseas buyers far more aggressively going forward.