$300 Million Worth of GPU Servers Smuggled to China via Malaysia
The Department of Justice has indicted a California businessman for evading US export controls on AI chips, with Singapore and Kuala Lumpur serving as mere waypoints.
Who covers it
Picked up by 8 outlets · 2 top-tier · 3 tech · 1 social post
In brief
Greg Lui, 38, owner of Earthmade Computer, is accused of shipping over $300 million worth of US-GPU-equipped servers to China between 2023 and 2024, via Malaysia and Singapore, using falsified documents. The case highlights how porous the chip export control regime really is, and Washington's new emphasis on criminal prosecution to enforce it.
🍺 Bar-stool version
The principle is simple: you're not allowed to send AI servers to China, so you send them to Malaysia, which is allowed to send them to China. It's the logistical equivalent of telling your mom you're sleeping at a friend's house that just happens to be next door to the party. Except here the friend pockets $176 million and an accomplice straight-up tells a Malaysian official that the goods have arrived safely at the Chinese buyer's doorstep. This matters because America's entire strategy for staying ahead in AI rests on these export controls, and they apparently have the sturdiness of a gate with no fence around it.
Key takeaways
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Greg Lui, aka Yiu Kong Lui, 38, of San Gabriel, California, was arrested based on a federal indictment handed down on September 29.
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Three counts: conspiracy to violate the Export Control Reform Act and the Export Administration Regulations, export smuggling, and money laundering conspiracy.
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Through his company Earthmade Computer Inc., based in City of Industry, he allegedly bought GPU servers from US manufacturers while misrepresenting end users and final destinations.
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The servers transited through Malaysia and Singapore, where no license is required, before being reshipped to China.
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Between January and October 2024, Earthmade allegedly received more than $176 million from two Malaysian shipping companies.
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Documented example: 27 servers ordered for about $7.6 million in January 2024, shipped from Los Angeles to Kuala Lumpur, then flagged as transshipped to a Chinese buyer in March 2024.
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He faces up to 20 years in prison for conspiracy, 20 years for money laundering, and 10 years for smuggling; he remains presumed innocent.
The scheme: a detour through Southeast Asia
According to the indictment, Greg Lui and his accomplices used Earthmade Computer, a small closely-held company in suburban Los Angeles, to purchase high-end servers equipped with US-made GPUs between 2023 and 2024.
These machines couldn't be shipped to China without a license from the Department of Commerce. So they were shipped, through several freight forwarders, to Malaysia and Singapore, countries for which no license is required.
Once there, the servers were reshipped to China. The press release states that Lui knew the real end users were located there, and that he provided US manufacturers with false documents about the products' destination.
The evidence
The case relies on a series of specific exchanges. In January 2024, Lui wrote to an accomplice that a Malaysian transshipment company wanted to buy 70 restricted GPU servers, and attached a compliance form stating that the company knew the US rules.
That same month, he placed an order for 27 of these servers from a US manufacturer for about $7,614,000. The packing list for the Los Angeles–Kuala Lumpur flight explicitly listed controlled servers, which are prohibited for shipment to China without a license.
In March 2024, an accomplice wrote to a Malaysian government official that these 27 servers had indeed been transshipped to a buyer based in China. On the financial side, more than $176 million was reportedly paid to Earthmade by two Malaysian companies between January and October 2024.
A national security case, not a customs one
The case is being brought by the National Security Division and the US Attorney's Office for the Central District of California. The investigation involves the Commerce Department's Bureau of Industry and Security, the FBI's counterintelligence division, and the Defense Criminal Investigative Service (DCIS).
The FBI goes further than the indictment in its statement: according to Roman Rozhavsky, Lui allegedly sold hundreds of millions of dollars' worth of American technology to the Chinese government. Authorities justify the restrictions on the grounds that these GPUs can significantly contribute to other nations' military capabilities.
The press release also mentions asset seizures, with civil and criminal forfeiture proceedings underway.
A vocabulary detail that isn't one
The DOJ press release never once mentions 'artificial intelligence.' It consistently uses 'Super Intelligence (SI),' including in quotes from officials: 'SI is the defining technology of the era.'
The choice of this terminology in an official Justice Department document goes unexplained. At the very least, it reflects an intent to frame these chips as a top-tier strategic technology, on par with weaponry.
“SI is the defining technology of the era. — John A. Eisenberg, Assistant Attorney General for National Security”
“This defendant allegedly used false paperwork and shipments through third countries to smuggle more than $300 million in export-controlled computer servers to China. — Bill Essayli”
“An indictment is merely an allegation.”
Why it matters
Export controls on GPUs are Washington's main lever for slowing China's AI capabilities, and this case exposes their most obvious flaw: transshipment through third countries. If the allegations hold up, more than $300 million worth of servers passed through a small California firm and two Malaysian intermediaries without manufacturers blocking anything, relying solely on declarative paperwork. This raises the question of accountability for server builders and chipmakers, whom the press release carefully avoids naming, and the pressure that will now fall on Malaysia and Singapore, which have effectively become reexport hubs. The shift toward criminal prosecution, with FBI counterintelligence and the Pentagon involved, signals that Washington now treats this kind of trafficking as economic espionage rather than a mere trade violation. Still, an indictment is only an allegation, and agency statements—particularly the FBI's claim of a direct sale to the Chinese government—go further than what the document itself details.
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