California Tech CEO Arrested for Alleged Smuggling of AI Chips

On Wednesday, federal agents detained a tech CEO from California, accused of illegally exporting over $300 million worth of restricted AI chips to China.

Greg Lui, 38, also known as “Yiu Kong Lui,” hails from San Gabriel and faces multiple federal charges for allegedly selling large quantities of American-made AI graphics processors to Beijing, violating U.S. laws that potentially compromise national security.

FBI and Department of Commerce agents carried out a covert operation at the City of Industry location of Earthmade Computers, a company founded by Lui, which he allegedly used to facilitate this illegal yet lucrative operation.

Authorities tracked Lui as he drove a Tesla Cybertruck wrapped in white from his upscale San Gabriel residence to Earthmade’s modern offices in an orderly industrial park. He was apprehended at gunpoint shortly after arriving at work and did not make any comments as he was searched and taken away for processing.

According to federal prosecutors, from 2023 to 2024, Lui and his accomplices utilized Earthmade to procure and send sensitive AI technology to China without obtaining the necessary export licenses from the Department of Commerce—licenses designed to support U.S. foreign policy and safeguard national interests.

Instead of shipping directly to China, they first sent the technology to countries like Malaysia and Singapore where license requirements are less stringent, and then resold it illegally to China.

The technology in question includes high-performance computer servers with processors produced by Nvidia Corp, a company located in Santa Clara that specializes in AI innovations. Federal regulations flag this tech as potentially beneficial to the Chinese military.

Allegedly, Lui and his associates crafted fake documents to suggest that the dangerous AI technology was headed to locations that didn’t need export licenses when placing orders with suppliers like Nvidia.

After securing those orders, he hired freight forwarding companies to transport the processors to Malaysia and Singapore. Once those items arrived, Lui collaborated with his partners to reroute them to China.

Between January and October 2024, Earthmade reportedly received upwards of $176 million from two Malaysian shipping companies tied to this operation, as outlined in court documents.

Prosecutors assert that Lui was fully aware that his actions were unlawful, with evidence to support this claim.

For instance, they noted that Lui sent an email to a conspirator in January 2024, indicating a Malaysian transshipment company’s interest in acquiring 70 servers equipped with controlled AI technology, acknowledging the existing legal restrictions against such sales.

Later that month, he purchased 27 of those servers for around $7.6 million, which were shipped from Los Angeles to Kuala Lumpur, Malaysia. Two months afterward, one of his associates informed a Malaysian official via email that the servers had already been redirected to China.

Prosecutors also revealed that Lui used accounts at JP Morgan Chase and Bank of America in Los Angeles to manage the financial transactions related to the operation.

He faces various charges, including conspiracy to violate the Export Control Reform Act, smuggling, and conspiracy to commit money laundering. If found guilty, he could spend up to 50 years behind bars.

The U.S. Department of Commerce, the Defense Criminal Investigative Service, and the FBI are currently conducting an investigation into the case.

According to his LinkedIn profile, Lui has been in the tech scene for about eight years, starting with a role at Amplitude Tech Hosting Service, a firm based in Denver that focuses on database colocation.

He founded Earthmade Computer in 2021, which also specializes in database colocation alongside the procurement and export of computer processors.

Investigators claimed that Lui transformed his business into a means for perpetrating these alleged crimes, amassing significant wealth that allowed him to own a nearly $2 million nine-bedroom mansion in San Gabriel.

Before venturing into technology, Lui ran a restaurant, specializing in extremely spicy Sichuan cuisine. In 2012, he co-founded Duo-Pot in Arcadia, a hot pot and dry pot restaurant known for its spicy frog dishes, which ultimately closed in 2021, according to his LinkedIn information.