According to a DOJ press release, Lui and unidentified co-conspirators exported the high-end servers from 2023 to 2024, first shipping them to Malaysia and Singapore, where the restrictions do not apply, before rerouting them to buyers in China, including the Chinese government. Lui owned California-based Earthmade Computer Inc. and allegedly used false paperwork to misrepresent the chips’ final destination, claiming they would go to permissible end users not requiring an export license.
“This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California.
Lui was arraigned and made his initial appearance on October 1. The FBI, the Department of Commerce’s Bureau of Industry and Security Office of Export Enforcement, and the Defense Criminal Investigative Service are jointly investigating.
The case is the latest in a series of indictments over illegal export of restricted AI hardware to China. Last month, nine people were indicted in Taiwan over the export of Nvidia B300 GPUs to China. The United States and its allies have imposed broad export restrictions on several AI chips and related hardware to maintain a technological lead over China. The demand for powerful Nvidia GPUs remains high in China, creating a market for smuggled hardware.
“Preventing the illegal export of controlled technology is critical to protecting our national security,” said Special Agent in Charge John E. Helsing of the Department of Defense Office of Inspector General Defense Criminal Investigative Service Western Field Office. “These technologies provide core advantages to U.S. forces, and ensuring they remain safeguarded prevents adversaries from exploiting them.”